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Cases

O’Donnell v. Kilsaran Concrete Ltd

[2002] 1 I.L.R.M. 551
JUDGMENT of Mr. Justice Herbert delivered the 2nd day of November, 2001
1. On the 19th May, 1987 the Plaintiffs entered into a contract in writing, but not under seal, with the second named Defendant to build a dwelling house at Rathanoragh, Strandhill Road, Sligo. The work was carried out using a cavity wall system with solid five newton concrete blocks 100mm x 440mm supplied by Spollen Concrete Limited to the second named Defendant. It is accepted by the parties that there was no privity of contract between the Plaintiffs and Spollen Concrete Limited for whose torts, (if any), in this transaction the first named Defendant has accepted responsibility.

2. An Architects Certificate of Practical Completion was issued in March 1988 and the Plaintiffs moved into occupation the same month. A number of defects were identified in what is commonly referred to as a, “snags list” and these matters were attended to by the second named Defendant in 1989.

3. In 1991 cracks appeared in the outside walls of the house in the area of the garage wing which joins the main structure at a right angle to its long axis. This cracking was attributed, – the evidence does not indicate by whom, – to settlement of the structure. The existing plaster in this area was removed and the area was replastered, I assume by the second named Defendant or by someone on its behalf, though this is not clear by the evidence.

4. In 1997 the second named Plaintiff decided that she would like to replace the existing window in the lounge area of the house with a bay window. Mr. David Lawlor, the architect who designed the house was consulted. In the course of discussions in May 1998, the second named Plaintiff drew Mr. Lawlor’s attention to cracking in the plaster of the lower section of the outside wall of the main structure of the house adjoining the garage block and in the garage itself. Mr. Lawlor consulted Mr. Roderick McLoughlin, a Civil Engineer, and he examined the walls in October 1998. Mr. McLoughlin identified the problem as due to the presence of more than 0.5% iron pyrites in the concrete blocks with which the wall was constructed. This mineral undergoes a chemical reaction if the wall becomes water saturated in the presence of oxygen and this reaction results in splitting and rust staining of the blocks. The speed with which this deterioration takes place is accelerated by increased temperature. Mr. McLoughlin when crossexamined by Counsel for the Defendants was unable to express any opinion as to the cause of the cracking in the garage area in 1991. He stated that settlement cracks can occur many years after a structure is built. He said that he had concluded after discussing the matter with the first named Plaintiff that the cracking which he had identified as due to an excess of iron pyrites in the cement blocks was of recent origin. The fact that no complaints were made to the second named Defendant by the Plaintiffs after 1991 lends support to this view. In answer to Counsel for the Defendants Mr. McLoughlin agreed that the cement blocks used in the construction of this dwelling house were unsuitable and defective from the outset and should not have been used for either the inner or outer sections of the cavity walls.

5. On the 4th June, 1999 a plenary summons was issued by Mullaneys, Solicitors for the Plaintiffs claiming damages for breach of contract, misrepresentation, negligence and breach of duty on the part of the Defendants their servants and/or agents. On the 18th November, 1999 a statement of claim was delivered claiming damages for breach of contract on the part of the second named Defendant, negligence and breach of duty on the part of both Defendants and breach of statutory duty on the part of the first named Defendant. A defence was delivered on the 3rd February, 2000 on behalf of all the Defendants. In addition to the other pleaded defences the Defendants specifically pleaded the provisions of Section 11(1)(a) and 2(a) of the Statute of Limitations, 1957, as amended and extended by the Statute of Limitations (Amendment) Act, 1991 and say that the claim of the Plaintiffs is time barred. By way of a special reply delivered on 1st March, 2000 the Plaintiffs plead that their cause of action accrued within six years prior to the commencement of the action and is therefore not time barred.

6. This is a Trial of a Point of Law prior to Trial which was set down for hearing under Order 25 of the Rules of the Superior Courts, 1986 as to whether the claims of the Plaintiffs, (if any), in Contract or in Tort are time barred.

7. Subsection 11(1)(a) of the Statute of Limitations 1957 provides as follows:-

“The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued –
(a) Actions founded on simple contract .”

8. Subsection 11(2)(a) of the Statute of Limitations 1957 as substituted by Section 3(2) of the Statute of Limitations (Amendment) Act, 1991 provides as follows:-

“Subject to the paragraph (c) of this subsection and to Section 3(1) of the Statute of Limitations (Amendment) Act, 1991 an action founded on Tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.”
9. Paragraph (c) relates to actions for damages for slander and Section 3(1) of the Statute of Limitations (Amendment) Act, 1991 relates only to actions for personal injuries. Accordingly the relevant period of limitation in tort applicable in this matter is six years from the date on which the cause of action accrued.

10. Counsel for the Defendants, who are the Applicants in this preliminary trial of a point of law, argued that any cause of action of the Plaintiffs in contract accrued when the breach of contract occurred, that is in 1988 when the defective blocks were used by the second named Defendant in the construction of the dwelling house. Misrepresentation on the part of the Defendants their servants and/or agents is pleaded in the plenary summons in this case but is not pursued in the Statement of Claim and no argument based upon fraud or fraudulent concealment was addressed to the Court on behalf of the Plaintiffs/Respondents at the hearing of this preliminary trial of a point of law. Accordingly, in my judgment any cause of action in contract accrued prior to March 1988 when the Architect issued his Certificate of Practical Completion and consequently became time barred prior to the 4th June, 1999 the date when the plenary summons was issued.

11. The Plaintiffs/Respondents plead a cause of action in negligence only against the first named Defendant and plead a cause of action in negligence as an alternative plea against the second named Defendant. Counsel for the Defendants/Applicants did not argue, and in my judgment correctly so having regard to the Statement of the Law in this Jurisdiction expounded by the Supreme Court in the case of Finlay v. Murtagh [1979] IR 249, that the existence of a contractual relationship between parties precludes the injured party from seeking a remedy in tort on the same facts.

In the case of Hegarty v. O’Loughran [1990] IR 148 at 158, Griffin, J., in the Supreme Court stated that:-
“….. When the wrong is not actionable without actual damage as in the case of negligence, the cause of action is not complete and the period of limitation cannot begin to run until the damage happens or occurs”

12. However, once the damage occurs, it is clear from the decisions of the Supreme Court in that case and in the case of Tuohy v. Courtney and Larkin and Ors [1994] 3 IR 1, that time begins to run and continues thereafter to run, except in those cases to which Part III of the Statute of Limitations 1957, the Statute of Limitations (Amendment) Act, 1991 and the Statute of Limitations (Amendment) Act, 2000 apply. These statutory provisions are not relevant to the matters at issue in this action.

13. Counsel for the Plaintiffs/Respondents argued that the damage in this case did not occur until 1997 or 1998 and that accordingly their cause of action did not accrue until then. Counsel for the Defendants/Applicants argued that the damage occurred in 1988 or alternatively in 1991 and that accordingly the Plaintiffs’ right to recover in tort is time barred.

14. Counsel for the Plaintiffs/Respondents relied upon the decision of the House of Lords in the case of Pirelli General Cable Works Limited v. Oscar Faber and Partners (a Firm), [1983] 2 AC 1. Counsel for the Defendants/Respondents relied upon the decision of O’Hanlon, J., in the case of Doyle v. C. and D. Providers (Wexford) Limited [1994] 3 IR 57, a decision of the High Court on appeal from the Circuit Court and the decision of Geoghegan, J., (then of the High Court) in the case of Irish Equine Foundation Limited v. Robinson and Ors [1999] 2 ILRM 289 at 290.

In the case of Pirelli v. Oscar Faber and Partners (a Firm) Lord Fraser of Tullybelton delivering the unanimous verdict of the House of Lords held as follows at page 16 of the Report:-
“….. There is an element of confusion between damage to the Plaintiff’s body and latent defect in the foundations of a building. Unless the defect is very gross it may never lead to any damage at all to the building. It would be analogous to a predisposition or natural weakness in the human body which may never develop into disease or injury. The Plaintiff’s cause of action will not accrue until damage occurs, which will commonly consist of cracks coming into existence as a result of the defect even though the cracks or the defect may be undiscovered and undiscoverable. There may perhaps be cases where the defect is so gross that the building is doomed from the start and where the owner’s cause of action will accrue as soon as it is built, but it seems unlikely that such a defect would not be discovered within the limitation period. Such cases, if they exist, would be exceptional.”

15. In that case the Defendants were a firm a consulting engineers who had been engaged by the Plaintiffs to advise them in relation to a building. The building included a chimney about one hundred and sixty feet high. The chimney was made of precast concrete. Unfortunately the concrete used for the refactory inner lining of the chimney was partly made of a relatively new material called Lytag which was unsuitable for the purpose. Cracks developed and eventually the chimney had to partly demolished and replaced. The chimney was built during June and July 1969. The Trial Judge found on the evidence that damage in the form of cracks near the top of the chimney, must have occurred not later than April 1970 which was more than eight years before the writ was issued.

16. In the present case, Mr. McLoughlin, gave evidence that having seen the cracks in October 1998 and having discussed the matter with the first named Plaintiff, he, as an expert, was satisfied that the cracks which he identified as due to an excess of iron pyrites in the construction blocks were of recent origin. He described the cracks as ranging from 2mm down to hairline. No evidence was called by the Defendants/Applicants to refute this opinion despite the fact that a joint inspection was carried out by engineers for each party on the 16th April, 1999, as appears from a letter dated the 8th June, 1999 from Messrs Donal O’Hagan & Company Solicitors for the Defendants/Applicants to Mullaneys, Solicitors for the Plaintiffs/Respondents. The Defendants/Applicants did not offer any evidence to link the cracking which had occurred in the garage wing of the house in 1991 with that which Mr. McLoughlin categorised as of, “recent origin” in 1998. After the 1991 cracking in the relatively limited area of the garage wing of the house had been remedied there were no further complaints by the Plaintiffs until May 1998. In the circumstances I am satisfied that the cracking due to the excess of iron pyrites in the block work of the dwelling house did not develop until well within the limitation period of six years prior to the 4th June, 1999 the date when the plenary summons in this action was issued. To draw any other inference would be to attribute a wholly unnatural meaning to the phrase, “of recent origin” used by Mr. McLoughlin.

17. Counsel for the Defendants/Applicants submitted that if the law as stated by the House of Lords of the United Kingdom in the case of Pirelli v. Oscar Faber and Partners (a Firm) , was substantially in accordance with the law of this Country, this dwelling-house because of the defective block work was a building, “doomed from the start” so that the cause of action accrued and time began to run when the dwelling house was built in 1988.

18. Mr. McLoughlin agreed in cross-examination that the blocks were unsuitable from the start and should not have been used. He said that the blocks were unsuitable only because of the danger of the eventuality which in fact occurred in this case. He said that the blocks were otherwise capable of functioning but carried a risk which any competent builder would find unacceptable, and which could not be eliminated by the use of plastering or pebble dashing. This risk was that a sufficiently rapid chemical reaction could occur within the blocks if they became water saturated in the presence of oxygen, – a not unusual occurrence in the climatic conditions of the West of Ireland and this would result in cracking and rust staining of the blocks. While Lord Fraser was prepared to assume that defects could exist which were so gross as to doom a building from the start he considered that such cases would be exceptional. In the Pirelli case it was held that the cause of action accrued in Spring 1970 when, as found on the evidence by the Trial Judge, damaged in the form of cracks near the top of the chimney must have come into existence whether observed at the time or not. I find the essential facts of that case to be indistinguishable from the facts of the present case. The presence of the iron pyrites like the presence of “Lytag”, was a latent defect in the structure which though predisposing the building to damage might never lead to any actual damage to the building at all. In the case of Ketteman v. Hansel Properties Limited & Ors [1987] AC 189, it was pointed out by Lord Keith of Kinkel at p.205 of the report that a building should not be considered “doomed from the start”, for purposes of statutes limitation merely because it had a latent defect which must inevitably result in some damage at some later stage.

19. In my judgment the decision of O’Hanlon, J., in the case of Doyle v. C. and D. Providers (Wexford) Limited , [1994] 3 IR 57, does not assist the Defendants/Applicants. Though damages for negligence and breach of duty was pleaded, there is no other indication from the judgment that any case in tort was argued before the learned Judge. There is, for example, no reference in the report of the judgment of questions of liability for the sale of non dangerous defective products or of the recovery of damages for pure economic loss being raised and considered by the Court. The learned Judge identified the date when the cause of action accrued as being the date when:-

“….. The Defendant made delivery to him of materials which were at variance with those which he had ordered and which were the subject of the contract between the parties”

20. The learned Judge then went on to remark:-

“….. The fact that the Plaintiff through no fault of his own may have remained in ignorance of the Defendants alleged breach of contract for a period of several years……. Did not prevent the claim becoming statute barred.”

21. Despite the headnote I am quite satisfied that this case was decided as a matter of Contract Law only. The unsuccessful attempt by the Plaintiff to amend the pleadings immediately prior to the hearing of the Appeal by pleading fraud lends further support to this view.

22. In the instant case Counsel for the Defendants/Applicants submitted that as the damage pleaded by the Plaintiffs/Respondents in the Statement of Claim was solely economic loss, with no element of injury to any person or damage to any property other than the alleged defective structure itself they could not be successful in claiming damages based upon negligence. Counsel for the Plaintiffs/Respondents argued that the Law in this Jurisdiction allows for the recovery of such damages and referred to the very well known decision of Costello, J., (as he then was) in Ward v. McMaster and Another, [1985] IR 29.

23. In my judgment the Court is not concerned with this issue at the Trial of this Preliminary Point of Law. The Court is not at this time considering whether the Plaintiffs/Respondents have a case in tort or in contract: the sole issue now before the Court is whether, if such claims exist they are time barred. The Court does not at this time express any view whatsoever as to whether the claims of the Plaintiffs/Respondents if they are not time barred, will or will not be successful in law or on the merits.

24. In my judgment the decision of Geoghegan, J., in the High Court in the case of Irish Equine Foundation Limited v. Robinson and Others, [1999] 2 ILRM 289 at 290 does not assist the Defendants/Applicants. In that case the learned Judge accepted that if experts with the same qualifications as the Defendants experts had been retained by the Plaintiffs to inspect the roof in question just after it had been constructed they would, if the Plaintiffs allegations were correct, have reported that the roof was defectively designed. The learned Judge says at page 294 of the report:-

“It would seem to me that if the roof, the subject matter of this action was defectively designed for the reasons suggested by the Plaintiff this would have been manifest at any time to any expert who examined it”.

25. Earlier in his judgment the learned Judge said:-

“ I think therefore that the Heagarty v. O’Loughlan decision must be taken as authority for the view that prior to the Statute of Limitations (Amendment), Act, 1991, the cause of action for personal injury did not arise until the injury was manifest…….”

26. He then concluded that these principles now applied only to cases of damage to property though he appears to express some hesitation in this regard.

27. In that case the learned Judge found on the evidence and the pleadings that it was manifest that the roof was incorrectly designed immediately after construction was completed or even before it was completed and that pure economic loss would inevitably be involved in making it good.

28. In the present case I am satisfied on the evidence that the damage only came into existence not long prior to October 1989 or in the terminology used by Geoghegan, J., was not manifest until then. It is not necessary for the Court to express an opinion on the vexed question of “discoverability”, because in this case the damage having come into existence not long prior to October 1998 it was drawn to the attention of Mr. Lawlor in May 1998 and by Mr. McLoughlin in October 1998 and the plenary summons was issued on the 4th June 1999 well within the limitation period.

29. The Court therefore finds that the cause of action pleaded by the Plaintiffs/Respondents in contract is time barred, but that the cause of action against the Defendants or either of them pleaded in tort is not time barred.

Coyne v Hunt

Assizes.

11 March 1886

[1886] 20 I.L.T.R 82
Morris C.J.

Morris, C.J., held that the plaintiff was entitled to recover, as the action commenced with the delivery of the civil bill to the process server and the entry by him, in the course of his duty, of the receipt of the civil bill in his book.

Kenny v Western Health Board

[2006] I.E.H.C. 370

Addendum delivered on the 22nd day of November, 2006 to the judgment of the Hon. Mr. Justice Quirke, previously delivered on the 2nd day of October 2006.
I have received further written submissions from the defendants in relation to the possible effect of the provisions of s. 31 of the Civil Liability Act, 1961 on the issue of contribution and indemnity in these proceedings.
On behalf of the first named defendant it is contended that the Health Board’s claim against the estate of Dr. Meehan for indemnity and contribution differs fundamentally from the plaintiff’s claim against the defendants.
Mr. Keane S.C. argues that the Board’s claim is for an order protecting the Board from liability for alleged negligence on the part of the late Dr. Meehan. He contends that, as such, it cannot be categorised as a ” proceeding” within the meaning ascribed to that word by the provisions of subsection (2) of s. 9 of the Act of 1961.
He claims that the Board’s claim comprises “an action… for contribution” within the meaning ascribed to that term by the provisions of s. 31 of the Act which expressly permits the Board’s claims to be commenced “within the period of two
years after the liability of the claimant is ascertained or the injured person’s damages are paid, whichever is the greater”.
Mr. McGrath S.C., on behalf of the estate of Dr. Meehan, contends that s. 31 of the Act has no express application to the facts of this case. He points to the fact that the s. 30 of the Act provides that the right to contribution is expressly “deemed to be a cause of action within s. 9” of the Act. He argues that a claim for contribution must accordingly be categorised as a “proceeding” within the meaning of that section and must be deemed to be regulated by the statutory time limit prescribed by the section.
Additionally Mr Mc Grath invoked the maxim “generalia specialibus non derogant”. He contended that the express provisions of s 9 should be preferred to the more general provisions of s 31.
The Rule of statutory construction known as “generalia specialibus non derogant” is defined as a rule which requires that “general things do not derogate from special things”. (See Murdoch’s Dictionary of Irish Law, 4th Ed.)
In summary the rule provides that where an earlier statute deals expressly and precisely with a particular issue, a later statute, enacted in general terms, will not repeal the earlier instrument unless the contrary intention is indicated within the legislation.
The Rule has been considered in this jurisdiction on a number of occasions (see D.P.P. v. Scott Grey [1986] I.R. 317, The National Authority for Occupational Safety and Health v. Fingal County Council) [1997] 2 I..R. 547 and others). In summary it has been argued, approved and accepted by the Irish courts as a maxim of legislative interpretation. However, most of the cases reported in this jurisdiction concerned conflicts between the provisions of two separate instruments. No specific authority can be readily found which relates to conflict between two sections of the same statute.
In the instant case it is undeniable that the provisions of s. 9 of the Act of 1961 are clear, precise and unambiguous. As indicated earlier the provisions of that section were upheld as constitutionally valid by the Supreme Court in Moynihan v. Greensmyth [1977] I.R. 55. The intention of the legislature and the reasons which gave rise to the enactment of the section were expressly considered and identified by the Supreme Court in that judgment.
The relevant provisions of s 31 of the Act appear prima facie to be inconsistent with the provisions of s 9, (2). It cannot be contended that the provisions of s. 31 of the Act are wholly general in nature. The section, inter alia prescribes precise time limits within which claims for contribution may be brought.
The provisions of s. 31 of the Act are, however, more general in nature than the provisions of s. 9(2).The latter expressly provide that, unless commenced within the precise periods prescribed by the section, no proceedings whatever are maintainable against the estate of a deceased person such as Dr. Meehan.
For the reasons identified by Mr. McGrath I am satisfied that the Board’s claim against the estate of Dr. Meehan comprises a “proceeding” within the meaning of s.9 of the Act.
Applying the rule “generalia specialibus non derogant” and having regard to the purpose of the legislation and the intention of the legislature as identified by the Supreme Court in Moynihan v. Greensmyth I am satisfied also that the provisions of s. 9, (2) of the Act apply to the Board’s claim for contribution against Dr. Meehan’s estate.
Accordingly the Board’s claim against Dr. Meehan’s estate is dismissed.
Approved: Quirke J

 

Freisburg v Farnham Resort Ltd

[2012] IEHC 219

JUDGMENT of Mr. Justice Hogan delivered on 24th May, 2012
1. This is an application brought by the third party (“Angelo Po”) pursuant to Ord. 16 RSC to set aside a third party notice issued pursuant to the leave granted by this Court (Quirke J.) on 13th February, 2012. The third party notice arises out of an incident which is said to have occurred on 10th October 2006. The plaintiff (“Mr. Freisberg”) in these personal injuries proceedings is a chef who works at the Farnham Radisson Hotel in Co. Cavan. Angela Po are an Italian company who supplied a soup kettle to the second named defendant (“Bunzl”) in April, 2006. Bunzl in turn supplied the equipment to the first named defendant (“Farnham”). Farnham are the operators of the hotel and employers of the plaintiff.

2. On 10th October, 2006, Mr. Freisberg contends that he was working in the hotel when there was a sudden and unexpected electrical flash on the panel of the soup kettle which led him to believe that he was being thrown by a small electric flash. Angelo Po were then contacted by Bunzl in relation to this incident. Angelo Po immediately dispatched a technician to inspect the kettle and he apparently concluded that the kettle was undamaged save for a light fixture which had exploded. In December 2006 Angelo Po sent replacement lamps for this appliance to Bunzl. There the matter rested so far as Angelo Po was concerned and nothing further so far as they were concerned was to happen until some four years later.

3. But before explaining how this development came about, it is necessary first to retrace the narrative so far as the plaintiff is concerned. He claimed that he suffered personal injuries as a result of the incident and, pursuant to an authorisation granted by the Personal Injuries Assessment Board, he commenced proceedings against Farnham and Bunzl only on 28th April, 2008. These proceedings were then served on Bunzl’s solicitors in early May 2008.

4. One measure of the rather unhurried approach taken by Bunzl to these proceedings was that it took it almost six months to enter an appearance and then only after a motion for judgment in default of defence. Following an exchange of particulars, a further motion had to be issued by the plaintiff to compel the delivery of a defence. This motion issued on 25th May, 2009, but a defence was not filed until some nine months later on 16th March, 2010. In other words it took almost two years for a routine defence to be filed.

5. Bunzl were ordered by the Master of the High Court on 18th June, 2010, to make discovery in relation to “the testing, inspection and repair of the soup kettle” within six weeks of that date, but the affidavit of discovery was sworn only on 9th May, 2011.

6. In the meantime Bunzl had written to Angelo Po on 14th March, 2011, claiming an indemnity and contribution. One can fairly describe this letter as being in the nature of a bolt from the blue so far as the third party was concerned. Nothing had happened in the interval since the delivery of replacement lamps which suggested that any of the other parties involved in this incident might seek to fix Anglo Po with liability of any kind. One might have expected that, having a written a letter of this kind, Bunzl would immediately make good their threat to issue third party proceedings seeking to join Angelo Po to the litigation “within 14 days from the date of this letter”. Yet again nothing further happened until 7th December, 2011 -some nine months later- when a motion seeking leave to join a third party was issued out of the Central Office. That motion was made returnable for 13th February, 2012, some four days before the main action was originally scheduled for hearing.

7. I accept that Bunzl’s solicitors obtained the first available return date for this motion. Even then, it may be suggested, Bunzl could (and should) have applied to a judge of this Court for liberty to abridge time in view of the immediate urgency of the matter, not least the necessity to issue and serve the proceedings on an Italian company based in Modena. It appears that no judge was available to hear the full action on 17th February, 2012. While the action was re-listed for hearing on 20th April 2012, it presently stands adjourned for hearing until some time next month at the earliest. This timetable may be affected by the outcome of this motion.

8. In the meantime Anglo Po moved with commendable speed to have the third party notice set aside. Although the third party notice was served on them on 6th March, 2012, a letter requested the setting aside of the notice issued on 20th March. In fairness, Bunzl’s solicitors responded immediately rejecting this. The present motion seeking to have the third party notice set aside then issued on 26th March, 2012.

9. Briefly summarised, counsel for Anglo Po, Mr. White, contends that it would be unconscionable to allow the third party notice to stand, as this would otherwise infringe his client’s constitutional rights to trial within a reasonable period. He maintains that the ensuing delay has prejudiced his client’s interests and circumvents its rights to plead the two year limitation prescribed by the Statute of Limitations. On the other hand, Mr. Ó Scanaill S.C. counsel for Bunzl, contends that his client was entitled to proceed with caution before electing to sue the third party, not least giving the difficulties in identifying the cause of the (apparent) explosion and the associated difficulties in establishing causation.
Section 27(1)(b) of the Civil Liability Act 1961
10. The third party jurisdiction is governed by s. 27(1)(b) of the Civil Liability Act 1961 (“the Act of 1961”) which provides:-

“A concurrent wrongdoer who is sued for damages or for contribution and who wishes to make a claim for contribution under this Part-(2)(b) shall, if the said person is not already a party to the action, serve a third party notice upon such person as soon is reasonably possible and, having served such notice, he shall not be entitled to claim contribution except under the third party procedure. If such third party notice is not served as aforesaid, the court may in its discretion refuse to make an order for contribution against the person from whom the contribution is claimed.”
11. The objects of this sub-section are so well established and so well known they do not require any detailed consideration. Its main purpose is to avoid a multiplicity of actions arising out of the same dispute, so that, as I put it in EBS Building Society v. Leahy [2010] IEHC 456, “where possible all issues involving plaintiffs, defendants and third parties are heard together or in a sequenced trial”.
12. In this context, it must be recalled that the concept of what is “as soon as reasonably possible” within the meaning of the sub-section is a relative one and depends on the circumstances of the case: see, e.g., Connolly v. Casey [2000] 1 IR 345, Mulloy v. Dublin Corporation [2001] 41.R. 52, Robins v. Coleman [2009] IEHC 486, [2010] 21.R. 180 and Leahy.

13. Of course, the judicial discretion conferred by this sub-section must be exercised in accordance with fundamental constitutional principles: see, e.g., East Donegal Co-Operatives Ltd. v. Attorney General [1970] I.R. 317, 341 per Walsh J. This not only means that the discretion must be exercised in a fashion which respects basic fairness of procedures (cf here the comments of Henchy J. in Ó Domhnaill v. Merrick [1984] I.R. 151,159 ), but the court must be conscious of its obligation to uphold and apply the constitutional norms envisaged by Article 34.1 (administration of justice) and Article 40.3.1 (protection of personal rights): see, e.g., Doyle v. Gibney [2011] IEHC 10. As I noted in Doyle:-

“Quite apart from any considerations of the personal rights contained in Article 40, the speedy and efficient dispatch of civil litigation is of necessity an inherent feature of the court’s jurisdiction under Article 34.1. As I ventured to suggest in my own judgment in O’Connor v. Neurendale Ltd. [2010] IEHC 387, this constitutional imperative means that the courts have a jurisdiction (and, in an appropriate cases, a duty) to exercise their powers in a way which will best ensure that a litigant’s right to a hearing within a reasonable time is best vouchsafed. In any event, and for good measure, the same right is guaranteed by Article 6 ECHR: see Gilroy v. Flynn [2005] 1 ILRM 290 and McFarlane v. Ireland [2010] ECHR 1272.”
14. By assigning the administration of justice to the judicial branch, Article 34.1 presupposes that justice will be administered in an efficient and procedurally fair manner which respects the rights of litigants. One of those rights (which is a dimension of the right to fair procedures and is, in any event, reflected in Article 6(1) ECHR) is the right to a hearing within a reasonable time.
15. What amounts to a reasonable time will, of course, be measured by the specific context. Particular allowances may have to be made, for example, for those disadvantaged members of the community who by reason of indigency, lack of education and other similar factors may not have been in a position in the past to assert or protect their rights (see, e.g., Guerin v. Guerin [1992] 2 I.R. 287,293 per Costello J. and Hayes v. McDonnell [2011] IEHC 530 per Hanna J.). But the present case is about as far away from this as it is possible to imagine. The dispute – insofar as it concerns the third party proceedings – involves two commercial undertakings, each of whom have access to legal advisers of the highest quality and ability. While this may not be commercial litigation in the strict sense of the term, one may nonetheless adapt to this context the comments of Fennelly J. in Dekra Eireann Teo. v. Minister for Environment [2003] IESC 25, [2003] 2 IR 270 at 304 to the effect that in litigation of this nature involving disputes between well resourced corporate undertakings, “there should be very little excuse for delay.”

16. Next, the subject matter of the proceedings should be considered. While the factual context of this claim for personal injuries is admittedly unusual and the issue of causation is not straightforward, it is at the same time difficult to understand why, well over five years later, a claim of this kind still remains to be determined. It was certainly reasonable for Bunzl to investigate the cause of the explosion of the soup kettle before joining the manufacturer to the proceedings. In that context, the words of s. 27(1)(b) which require the concurrent wrongdoer to serve the third party “as soon as is reasonably possible” are not concerned, as Murphy J. put it in Mulloy ([2001] 4 IR 52 at 56) with “physical possibilities, but legal and perhaps commercial judgments”.

17. Therefore, as I suggested in Leahy, the question in cases of this kind thus becomes:-

“whether, having regard to all the circumstances, it was reasonable for a defendant to wait for the period in question before applying to join a third party, although any such permissible delay will generally be measured in weeks and months and not years.”
18. In the replying affidavits filed on behalf of Bunzl, great stress is laid on the fact that the expert reports prepared prior to December, 2011 had not definitively expressed a view on causation. In this regard, Bunzl’s consulting engineer, Mr. James Molloy, had carried out an inspection on 16th December, 2011, and supplied a report on 28th December, 2011. In that report, Mr. Molloy concluded that the “indicator light failed at the time when the plaintiff was cleaning the pot surface” and he went to suggest that the incident might well have been caused by moisture in the area where the cables entered the bulb, thus facilitating a short circuit “by tracking across insulating material to live terminals”. In the affidavits filed Bunzl accordingly suggested that it was not:-
“until the relatively recent exchange of expert reports pursuant to S.I. 391 of 1998 that the issues and, in particular, the issues in terms of causation crystallised to a sufficient extent so as to enable this defendant’s legal representatives to advise as to the suitability or otherwise of commencing third party proceedings…”
19. That may possibly be so, but the underlying issue of causation has been present from the start. After all, Bunzl were fully aware that the Angelo Po had agreed to supply replacement lamps as far back as December 2006. The question of causation may well have been problematic, but the parties surely must have known that this was likely to be a major issue. After all, the particulars pleaded as against Bunzl which were contained in the plaintiffs general indorsement of claim contended that it qua producer had supplied “a soup kettle which was dangerous and defective.” This pleading immediately brought the question of causation as between supplier and manufacturer directly into focus.
20. Viewed objectively, it is very hard to see how Bunzl was entitled to wait a further three and a half years from that date before bringing a third party motion of this kind. After all, it has never been explained why Bunzl waited for so long to commission a report from a consulting engineer or, for that matter, why it delayed so long in complying with relatively basic obligations with regard to the filing of an appearance and defence. Besides, the delay was immensely prejudicial to Angelo Po. Not only was the Italian company effectively deprived of its right to plead the Statute of Limitations as against the plaintiff by being joined as a third party in this fashion, it was unreal and unreasonable to expect that they should be joined within days of the scheduled start of the plaintiffs main action, even if that case did not proceed on that date for other reasons.

21. This is underscored by the Supreme Court’s conclusions in Mulloy. In that case the third party notice was issued some thirteen months after the defence had been filed. The Supreme Court held that it was possible for the defendant “on the information available to it to make a prudent and responsible decision several months before the application was brought”: see [2001] 4 IR 52 at 59, per Murphy J. This is true a fortiori in the present case. Taking the most benevolent view possible of the delays to date, the issue of third party joinder squarely arose following the delivery of the plaintiffs pleadings in May, 2008. This was then the time at which the report of the consulting engineer ought to have been commissioned. Very different considerations would have obtained had, for example, the application to join Angelo Po been made within the 2008 calendar year.

22. In these circumstances, I am coerced to the conclusion that the third party notice must be set aside for want of non-compliance with the requirements of s. 27(1)(b) of the 1961 Act. This is not simply a case where the non-compliance amounted to some harmless and technical breach of the statutory requirement. The non-compliance infringed the third party’s constitutional rights to basic fairness of procedures and its right to have proceedings determined within a reasonable time period. Measured against a two year limitation period contained in the Statute of Limitations (even if that period is itself perforce extended by reason of the operation of the Personal Injuries Assessment Board Act 2003), a delay of over five years in making a formal application to have a third party manufacturer joined to a (relatively) routine personal injuries action involving a defective product represents a manifest infringement of these rights.

23. It must also be acknowledged that a delay of this kind tends to subvert the legislative policy which underlies the Statute of Limitations, namely, that a defendant is entitled to organise his or her affairs on the basis that the limitation period has long expired. For good measure, one might also add that the delay was manifestly prejudicial, in that the effect of the third party notice was to catapult Angelo Po into the middle of a personal injuries trial which was due to start within a matters of days.
Conclusions
24. For all of these reasons mentioned above, I would accordingly set aside the third party notice on the ground that the delay in question amounted to a non-compliance with the requirements of s. 27(1)(b) of the Act of 1961 and a clear infringement of the third party’s constitutional rights to fair procedures and to a hearing within a reasonable time.

O’Byrne v Michael Stein Travel Ltd

[2012] IESC 62

Judgment delivered on the 19th December, 2012, by Denham C.J.
1. This is an appeal by Robert O’Byrne, Senior, and Charis O’Byrne, the first and second named third parties/appellants, referred to as “the appellants” from the judgment and order of the High Court (O’Neill J.) of the 25th July, 2011, which refused the appellants’ motion to set aside the third party notice issued on the 20th May, 2011, by Michael Stein Travel Limited, the defendant/respondent, referred to as “the respondent”, pursuant to leave granted by the High Court (O’Neill J.) on the 9th May, 2011.
Background
2. The substantive proceedings to which the appellants have been joined as third parties arise from unfortunate circumstances. Robert O’Byrne, the plaintiff, is the son of the appellants and at 17 years of age, on the 18th July, 2005, while on a package holiday with the appellants, he suffered serious injuries after diving into a swimming pool at night.

3. On the 12th June, 2008, the plaintiff, having attained majority, issued a personal injuries summons against the respondent alleging, inter alia, negligence, breach of duty and breach of contract. The plaintiff swore an affidavit of verification of the personal injuries summons on the 12th August, 2008, which was filed on the 20th August, 2008. The respondent delivered its defence on the 9th December, 2008.

4. The respondent filed a notice for liberty to issue a third party notice in respect of the appellants on the 26th January, 2011, and, on the 23rd March, 2011, filed a notice for liberty to amend its defence. Both motions were listed for hearing on the 9th May, 2011.

5. The affidavit grounding the motion for liberty to issue a third party notice on the appellants was sworn by Kevin Mays, solicitor for the respondent, on the 25th January, 2011, and stated at paragraphs 8 to 10:-

“I say and believe that the plaintiff arrived at the apartment complex with his parents and as a minor, he was under their supervision and control at all material times. I further say and believe that the plaintiff, with knowledge and consent of his parents and in their presence, at a time when he was a minor, consumed alcoholic beverages contrary to Spanish and Irish law.
I say and am instructed that under Spanish civil law such actions were negligent on the part of the plaintiff’s parents and they owed a common law duty of care to the plaintiff as he was at all material times under their control and supervision.

I further say and believe that the plaintiff’s parents were negligent and in breach of their common law duty of care to the plaintiff by allowing him to consume alcohol and further failing to supervise his actions which led to the plaintiff diving into the shallow end of the swimming pool.”

6. The motion to amend the respondent’s defence applied for liberty to add the following two paragraphs:
“3.e. The plaintiff was at all material times under the control, supervision and care of his parents. The Plaintiff’s parents and older family members arrived on the scene immediately after the accident and were responsible for bringing the Plaintiff to his bedroom and for his care thereafter.
4.q. The Plaintiff consumed a quantity of alcohol, over the course of the night that he knew or ought to have known would inhibit his judgment to such an extent as to result in a failure to exercise care for his own safety and more particularly caused him to proceed to dive into a swimming pool at a time when the use of the pool was prohibited and when he neither knew or cared as to whether it was safe to dive at the time and place when and where he did.”

7. In advance of the hearing of the respondent’s motions, the first named appellant swore an affidavit on the 4th May, 2011, and filed on the 5th May, 2011, on the plaintiff’s behalf in respect both motions stating, inter alia, at paragraphs 3 and 4 that:
“The Plaintiff was born in 1988, and was 17 years of age at the time of his accident. Although a minor, he was old enough not to be under the continuous supervision and control of his parents. The Deponent’s assertion to the contrary is manifestly unreasonable and an empty formula. The relevant hotel catered for large numbers of mid to late teenage children representing, by my recollection about one third of the hotel population and identifiable as a particular group of patron. The Deponent’s assertion about child management in this context is fundamentally contrary to the activity of the hotel, and all others in which I have ever stayed for a summer holiday. I do not believe that the Deponent’s formula is a reasonable foundation for a Third Party cause of action, and it does not provide the basis for any necessary amendment of the Defence.
I understand that the sale of alcohol to minors is an offence under Spanish law. The plaintiff did not drink alcohol in my presence or with my encouragement. I am fully conscious of the inclination of teenagers to take drink, and the peer pressure to do so. At age 17, I was aware that my son took alcohol from time to time but I was conscious of the difficulty of preventing it absolutely and also of the fact that he was a sensible youngster not inclined to abuse alcohol. Like all parents, I had to rely to a large extent on the good sense and lawfulness of alcohol vendors. I have enquired amongst the Plaintiff’s acquaintances who stayed with him at the hotel and have been able to establish that alcohol was sold at bars in the hotel indiscriminately to youngster’s [sic] underage, both in terms of quantity and ease of access. No effort was made to identify the age of purchasers, nor was any communication given by sign or otherwise to establish rule or standard. So far as I can ascertain, no measures were taken to enforce the law.”

At paragraph 10 of the affidavit, it was averred:-
“I do not believe that this application is made on its own merits but rather to substantiate an application to join Third Parties. The circumstances apparently relied upon had been known to the Defendant since July 2005 and the Plaintiff’s particulars were supplied in July 2009. At par. 10 of his Affidavit the Deponent says ‘it has become apparent’ that the Plaintiff was under his parent’s control. This assertion is again a formula used to disguise the absence of any change of knowledge. It is claimed that an amendment is ‘consequent upon this further information.’ The information appears to relate to the presence of the Plaintiff’s parents in the hotel but that cannot have either surprised the Defendant or have gradually emerged.”
The affidavit concluded with a prayer to the Court to refuse the motions because, inter alia, they are:
“unjustly made to found a Third party application which is destined to be late, oppressive and without disclosure of a case [sic] of action against the proposed new parties.”
8. On the 9th May, 2011, having regard to the affidavits lodged, including that of the first named appellant filed on the 5th May, 2011, and submissions of counsel for the respondent and counsel for the plaintiff, the High Court (O’Neill J.) granted liberty to the respondent to amend its defence and liberty to issue and serve a third party notice on the appellants.
9. The orders of the 9th May, 2011, have not been appealed.
Third party notice
10. The third party notice was dated the 20th May, 2011, and stated:

“The [respondent] claims against you to be indemnified against the plaintiff’s claim and the costs of this action or contribution to the full extent of the plaintiff’s claim on the grounds that you were responsible for the welfare of the plaintiff at the time of the accident, and that you owed the plaintiff a duty of care.”

Motion to set aside third party notice
11. The appellants entered an appearance on the 1st June, 2011, and filed a notice of motion on the 17th June, 2011, seeking to set aside the third party notice and proceedings pursuant to Order 16. In the affidavit of Robert O’Byrne, senior, of the 17th June, 2011, the grounds were stated to be inordinate delay, citing s. 27(1)(b) of the Civil Liability Act, 1961, In the affidavit of Robert O’Byrne, senior, of the 17th June, 2011, the grounds were stated to be inordinate delay, citing s. 27(1)(b) of the Civil Liability Act, 1961, in support, and that the proceedings were ill founded against the appellants.
Judgment of the High Court
12. On the 25th July, 2011, O’Neill J. refused the relief sought by the appellants finding that there had been considerable delay on the part of the respondent in processing the claim against the appellants and that he had considered on the 9th May, 2011, the affidavit of the first named appellant, who had set out his complaints of delay. The learned trial judge noted that the respondent’s affidavit of the 14th July, 2011, dealt with delay in a cursory manner.

The learned trial judge held that this application to set aside the third party notice was quite unusual as it involved the parents of the plaintiff and an issue of parental neglect and whether or not the plaintiff was under their care and control. He stated that the case against the appellants was one of substance and that prejudice was very unlikely. Justice must be borne in mind and also where the onus of proof lies. He held that it was quite clear that there is no prejudice and he held that to strike out the third party notice against the appellants would be disciplinary and that, referring to words of O’Flaherty J., orders should not be made for disciplinary purposes.
Notice of appeal
13. The appellants filed a notice of appeal against the judgment and order of the High Court of the 25th July, 2011, on the 9th August, 2011 on the following grounds:-

“1. The learned trial judge erred in law in not setting aside the said third party proceedings against the parents.
2. The learned trial judge erred in law, and on the facts, in failing to have due regard to the inordinate delay on the part of the [respondent] in seeking to join the parents as third parties herein, the accident, the subject of these proceedings having occurred on the 18th July 2005, the personal injuries summons herein having issued on 12th June, 2008, and an appearance thereto having been entered on behalf of the [respondent] on 23rd June, 2008.

3. The learned trial judge erred in law in failing to have due regard to the fact that the [respondent] herein gave no explanation, whether by way of affidavit or otherwise, in relation to the delay which occurred between October 2008 (when the application to join the parents as third parties should have been made) and 26th January 2011 (when the [respondent] issued a notice of motion to join the parents as third parties), save that the [respondent] at paragraph 9 of an affidavit sworn on behalf of the [respondent] on 14th July 2011 by Kevin Mays, Solicitor, groundlessly stated that ‘…there has not been an inordinate delay in issuing and serving the Third Party Notice’.

4. The learned trial judge failed to have due or any regard to the total absence of explanation for the aforesaid delay on the part of the [respondent] in seeking to join the parents as third parties herein.

5. The learned trial judge unfairly took in to account arguments which had been made on behalf of the Plaintiff herein on 9th May 2011, in motions herein to which the Parents were not then parties, and had no right of audience.”

Submissions
14. Very helpful written and oral submissions were given to the Court. Mr. Patrick Keane S.C., counsel for the appellants, said that the main point was delay by the respondent in seeking the third party motion. He submitted that time ran from when the defence should have been delivered, which he calculated as 24th October, 2008. He submitted that the amendment to the defence did not affect this time line. He further submitted that the claim as stated in the amended draft defence, as set out above, was very vague, and that it did not state any suggestion of negligence or other culpability of the parents. The Court was referred to relevant case law. It was pointed out that the onus was on the respondent on the issue of delay. Further, that no excuse for the delay was given.
15. Mr. Edward Walsh S.C., appeared on behalf of the respondent. Inter alia, he submitted that while it was normal for the respondent to explain delay, the Court had to look at all the circumstances. However, the replies to particulars led to the application to amend the defence, and then as an adjunct to join the appellants as third parties. Counsel accepted that he had not demonstrated what was the Spanish law. He submitted that in light of the amended defence the Court should look at all the circumstances of the case.
Law

Rules of the Superior Courts and legislation
16. Order 16, rule 1(3) of the Rules of the Superior Courts states:

“Application for leave to issue the third-party notice shall, unless otherwise ordered by the Court, be made within twenty-eight days from the time limited for delivering the defence or, where the application is made by the defendant to a counterclaim, the reply.”
Order 16, rule 8(3) states:
“The third-party proceedings may at any time be set aside by the Court.”
The appellants rely on s. 27(1)(b) of the Civil Liability Act, 1961:
“A concurrent wrongdoer who is sued for damages or for contribution and who wishes to make a claim for contribution under this Part—
[…]

(b) shall, if the said person is not already a party to the action, serve a third-party notice upon such person as soon as is reasonably possible and, having served such notice, he shall not be entitled to claim contribution except under the third-party procedure. If such third-party notice is not served as aforesaid, the court may in its discretion refuse to make an order for contribution against the person from whom contribution is claimed.”

[emphasis added]

Section 27(3) states:

“Where it is sought to serve a third-party notice making a claim for contribution, or making a claim for damages in respect of a wrong committed to the third-party plaintiff, such claim for damages having arisen in whole or in part out of the same facts as the facts giving rise to the principal plaintiff’s claim, leave to serve a third-party notice shall not be refused merely because the issue between the third-party plaintiff and the third party will involve a difficult question of law.”

17. Counsel opened case law to the Court, including Connolly v. Casey [2000] 1 IR 345; Molloy v. Dublin Corporation [2001] 4 IR 52; Greene v. Triangle Developments Limited and Wadding, [2008] IEHC 52, judgment of Clarke J. of the 4th March 2008; and Robins v. Coleman and Ors [2009] IEHC 486, [2010] 2 IR 180.
Chronology
18. Both counsel submitted a list of chronology to the Court. For the purpose of this judgment I have included the shorter version, that of the appellants. It sets out the following relevant dates:-

“12.6.08 Personal Injuries Summons issued.

23.6.08 Appearance by [the respondent].

9.12.08 [Respondent’s] Notice for Particulars.

9.12.08 Defence.

12.12.08 [Respondent’s] Notice of Motion to join Sol Melia SA as third party.

12.1.09 Order: liberty to join Sol Melia SA as third party.

30.7.09 Plaintiff’s Replies to [the respondent’s] Notice for Particulars.

12.3.10 Notice of Trial.

6.8.10 Notice of Change of Solicitor on behalf of [respondent].

26.1.11 [Respondent] issued Notice of Motion to join [the appellants] as third parties.

9.5.11 Order (O’Neill J.): giving liberty to the [respondent] to amend the defence.

9.5.11 Order (O’Neill J.): giving liberty to the [respondent] to serve Third party notice on [the appellants].

20.5.11 Third party notice served on [the appellants].

17.6.11 Notice of Motion by [the appellants] to have Third party Notice against them set aside.”
Decision
19. This appeal turns on the issue of delay. No issue of prejudice arose in the case.

20. It is specified in Order 16 Rule 1(3) of the Rules of the Superior Courts that, unless otherwise ordered by the Court, an application for leave to issue a third party notice must be made within 28 days from the time limited for delivering a defence. The High Court “otherwise ordered” by giving leave to the respondent to issue a third party notice on the 9th May, 2011. The appellants are seeking to set aside the third party proceedings under Order 16, Rule 8 which states that the third party proceedings may at any time be set aside by the Court.

21. I accept the submission on behalf of the appellants, on the dates of the pleadings, that 24th October, 2008 (taking into account the vacation) was eight weeks after the appearance. It was the 26th January, 2011 before the respondent issued motions to join the appellants as third parties. Thus, there was a very considerable delay from October 2008 to January 2011.

22. On behalf of the respondent, it was submitted that the date of the amendment of the defence was an important factor. Further, that it was dependant on replies to notice of particulars. However, that still leaves a considerable delay and a vacuum of information.

23. There is no doubt but that a court can take all the circumstances into account in considering a delay. In this case the respondent relied heavily on the date of the amended defence. However, in considering an application under Order 16, Rule 8 on grounds of delay, time is considered by the Court to run from the date when the defence should be delivered, not from the date of any amendment to a defence.

24. The respondent did not set out any details as to why the delay had occurred, or any excuses for the delay. Thus, while a court may take all the circumstances into account, such as the amendment to the defence, there needs to be evidence as to the reasons for, and excuses for, a delay. This was absent in the case. The onus lay on the respondent, but no explanation for the delay was given.
Conclusion
25. In the absence of any, or any adequate, explanation for the delay by the respondent, I would allow the appeal. The learned trial judge erred in law in failing to have regard to the inordinate delay on the part of the respondent in seeking to join the appellants as third parties, and to the failure of the respondent to give an explanation for the delay.

 

Irish Bank Resolution Corporation Ltd v McCaughey

[2014] IEHC 230

JUDGMENT delivered by Mr. Justice Kelly on the 29th day of January, 2014
The Case
1. This is an application for summary judgment for a sum of €7,730,102.18. That sum is allegedly due by the defendant to the plaintiff on foot of a series of credit agreements and facility letters executed between 1st September, 2006 and 28th March, 2007. These facilities are conveniently described and the amount due in respect of them as of 20th January, 2014, in the table which is contained at para. 7 of an affidavit of Conor Nestor sworn on 22nd January, 2014.

2. There is no dispute but that the defendant executed all of the relevant facility letters and drew down and has had the benefit of the funds described in them.

3. The plaintiff contends that the defendant has no defence to these proceedings and that it ought to be granted summary judgment in respect of the sum claimed in its entirety.
The Test
4. Before considering the defendant’s answer to this application, I ought to sketch out the test which I am obliged to apply on applications of this sort. That is what I did in my decision in Bank of Scotland Plc v. Mansfield [2011] IEHC 463, where I said:-

“8. The test to be applied by this Court on an application for summary judgment is well established. It has been stated and restated by the Supreme Court and this Court on many occasions in particular in recent times where applications for summary judgment, very often in respect of large amounts, are a commonplace.
9. The most recent statement from the Supreme Court on the topic is to be found in the judgment of Denham J. (as she then was) in Danske Bank A/S trading as National Irish Bank v. Durkan New Homes & Ors [2010] IESC 22.

10. Having recited the provisions of O. 37, r. 7 of the Rules of the Superior Courts that judge went on as follows:-

‘Several cases were opened before the Court which have addressed this jurisdiction. These included Bank of Ireland v. Educational Building Society [1999] 1 IR 220 where Murphy J. emphasised that it was appropriate to remit a matter for plenary hearing to determine an issue which is primarily one of law where a defendant identified issues of fact which required to be explored and clarified before the issues of law could be dealt with properly. He stated at p.231:-

‘Even if the position was otherwise, once the learned High Court Judge was satisfied that the defendant had ‘a real or bona fide defence’, whether based on fact or on law, he was bound to afford them an opportunity of having the issued tried in the appropriate manner.’

In Aer Rianta c.p.t. v. Ryanair Limited [2001] 4 IR 607, Hardiman J. reviewed Irish cases and concluded at p.623:-

‘In my view, the fundamental questions to be posed on an application such as this remain: is it ‘very clear’ that the defendant has no case? Is there either no issue to be tried or only issues which are simple and easily determined? Do the defendant’s affidavits fail to disclose even an arguable defence?’

11. At para. 22 of her judgment Denham J. stated as follows:-

“As stated in Banque de Paris v. de Naray [1984] Lloyd’s Rep. 21, by Ackner L.J. at p.23:-
‘It is of course trite law that O. 14 proceedings are not decided by weighing the two affidavits. It is also trite that the mere assertion in an affidavit of a given situation which is to be the basis of a defence does not, ipso facto, provide leave to defend; the Court must look at the whole situation and ask itself whether the defendant has satisfied the Court that there is a fair or reasonable probability of the defendants having a real or bona fide defence.’’

12. In Bank of Ireland v. Walsh [2009] IEHC 220, Finlay Geoghegan J. set out the principles applicable to the determination of an application such as this by reference to a decision of McKechnie J. in Harrisgrange Limited v. Duncan [2003] 4 IR 1. It is not necessary for me to repeat yet again the twelve considerations which he set out in that judgment but I do call attention to one of them where he said:-

‘the test to be applied, as now formulated is whether the defendant has satisfied the court that he has a fair or reasonable probability of having a real or bona fide defence; or as it is sometimes put, ‘is what the defendant says credible?’, which latter phrase I would take as having as against the former an equivalence of both meaning and result.’

13. Finlay Geoghegan J. said in relation to this:-

‘As appears from sub-paragraph (vii) above, the threshold is one of an arguable defence and is, in relative terms, a low threshold. However, in making that determination, the Court should have regard to whether what the defendant is saying is mere assertion and whether the proposed defence is credible in the sense explained by Hardiman J. in Aer Rianta c.p.t. v. Ryanair Ltd. [2001] 4 IR 607.’”

The Agreements
5. The first facility letter is dated 1st September, 2006 and was granted to part fund the defendant’s investment in the AIAC Woolgate Exchanged Geared Property Fund. The second facility was dated 10th October, 2006 and had as its purpose the part funding of the defendant’s equity investment in an entity called Peninsula Real Estate Fund which has been given the nomenclature for the purpose of these proceedings of the New York Hotel Fund. That is how I will refer to it.
6. The third facility was dated 17th November, 2006, and was broken down into three different elements. They were described as Facility A, B and C. Facility A was to increase the defendant’s investment in the Woolgate Exchange Geared Property Fund. Facility B was to part fund the defendant’s investment in the AIAC European Geared Property Fund (E.G.P.F.). Facility C was to fully fund the defendant’s investment in Riverdeep. The fourth facility was dated 2nd January, 2007 and was used to provide the defendant with a €5m investment line of which €1,737,000 was drawn down.

7. The fifth facility was dated 28th March, 2007 and was to part fund the purchase of two units at the Rockefeller Plaza in New York.

8. There are a number of features which were common to all agreements. First, each had a letter of facility setting out specific terms to which I will turn in a moment. Each of them was executed by the defendant. Each of them expressly provided that the facility granted was to be repayable on demand and that that demand might be served at any time by the Bank at its sole discretion without stating any reason for such demand. Without prejudice to the demand nature of each of the facilities they were all expressly stated to be repayable on or before a specified date, the latest of which was March 2008. Each of the facilities was also granted subject to the Bank’s general conditions governing personal loans. All provided that if there was any conflict between the terms of the facility letter and the general conditions, the terms of the facility should prevail. As is clear, the backstop date for the payment of the facilities has long since expired.

9. The facility letters were signed by Mr. McCaughey and in many cases were witnessed. Immediately, above his signature on each facility letter is to be found, the following:-

“I have read the conditions set out above and in the general conditions and in the credit agreement each of which form part of this agreement (the agreement) and agree to be bound by the provisions of the agreement. I am fully aware of, and understand, the nature of the agreement and have been advised to take and have been given due opportunity to take, separate independent legal advice on the effect of the agreement and have taken/waived (delete as appropriate) the opportunity to take such legal advice.”
In no instance was the appropriate deletion made in the latter clause of that last sentence. Amongst the general conditions under the heading “representations and warranties”, one finds the following:-
“the borrower represents and warrants to the bank that:-
(a) on execution, the agreement and any security documents executed pursuant thereto, constitute the borrowers legal, valid and binding obligations enforceable in accordance with their respective terms.”

10. It is common case that the defendant was an experienced businessman at the time when he executed all of these agreements.
11. The arguable defence which the defendant contends he has to these proceedings really falls into two parts. In truth, only one part can be considered a defence properly so called. The other part is a possible counterclaim. I will deal with the defence issue first.
The Defence
12. The defendant contends that he has led evidence sufficient to meet the threshold which he must achieve on an application for summary judgment. That evidence he says demonstrates a triable issue that, notwithstanding the clear terms of the written agreements executed by him, there was nonetheless a collateral contractual arrangement to the effect the term of the agreement would be “for the duration of the funds”. If correct this means that the facilities were not demand facilities nor were they repayable by March 2008 at the latest.

13. This issue is dealt with from para. 7 onwards in the defendant’s replying affidavit of 26th November, 2013. This is what he says:-

“7. Anglo Irish Bank (hereinafter referred to Anglo) had a model of lending that was based on its short term access to funds. It would agree to lend to customers on the basis of a longer term but would expressly provide for a 12 month or shorter facility on the documentation. The shorter periods would then be rolled over for the duration of the fund.
8. I can tell the court that the first agreement, the second agreement, the third agreement, facility A and facility B and part of the fourth agreement were for the purpose of investing in funds offered by the Anglo Irish Bank. All of these loan agreements were provided to me on the explicit confirmation from the Anglo Irish Bank that the term would be for the duration of the funds so that any provision to the contrary was subject to such representation and/or agreement.

9. In this regard, I beg to refer to an affidavit of Jason Drennan sworn on 23 May, 2013, when produced, which confirms that he explicitly confirmed to me that the loans were for the duration of the investment. I confirm that Mr. Drennan was an employee of Anglo and manager who had the role of raising equity from investors for investment opportunities. As is clear from his affidavit, he approached me in relation to the Woolgate fund, the New York Hotel fund, the European Geared Property Fund and the M&A Fund.”

14. The first thing to notice about these averments advancing this defence of a collateral contract is that they are limited to some of the facilities only. Facility C of the third agreement known as Riverdeep and the fifth agreement in its entirety are excluded. Thus, this line of defence does not extend to those facilities.
15. The second thing to note is reference to the affidavit of Jason Drennan. In fact, Mr. Drennan’s affidavit was not sworn in these proceedings and only became evidence as a result of being exhibited in a later affidavit of Mr. McCaughey sworn on 14th January, 2014. During the course of the hearing, counsel for the defendant indicated that he wished to have Mr. Drennan swear an affidavit in these proceedings in the precise terms of the exhibit. Counsel on behalf of the plaintiff sensibly indicated that I could treat Mr. Drennan’s affidavit as though it were sworn in these proceedings so as to avoid an adjournment of the application midstream. This is what Mr. Drennan says:-

“(1) I qualified in 1992 from Dublin City University with a business degree. I have worked for IFSRA, Davy Stockbrokers and IIB Private Bank. I joined Anglo Irish Bank Corporation (Anglo) in 2002. I left my employment with Anglo Irish Bank in 2007.
(2) I was a manger for Anglo Irish Private Bank and part of my role was to raise equity from investors for investment opportunities for Anglo private banking.

(3) In that capacity, I approached Gerard McCaughey and Gary McCaughey who ultimately entered into the Woolgate fund, the New York Hotel fund, the European Geared Property Fund and the M&A Fund all of which were sold by me. I understand that they also invested in a Taurus fund through a colleague of mine, Mr. Phillip Ahern. I can confirm that both Gerard and Gary McCaughey were provided with loan facilities by Anglo to invest into these funds. The basis on which these loans were provided were explicitly confirmed by me to them as being for the duration of the investment. This is part of the Anglo model. I explained to them that the loan offers would issue on a yearly basis and would roll over each year which was as per the Anglo model at the time.

(4) I have no hesitation in confirming my understanding as the person who sold the McCaugheys into these funds and who arranged the loan facilities. The McCaugheys fully understood that the loans were inextricably linked with the investment funds.”

16. The defendant relies on his own averments as to his understanding and the material sworn to by Mr. Drennan in support of his allegation of a collateral contract which overrides the demand nature of the facilities as specified in the facility letters executed by him. He says that his averments as to his belief and the testimony of Mr. Drennan find support in internal bank documents which he has obtained on foot of data access requests. These documents are all applications which were prepared for the Bank’s credit committee. In each case, they specify the amount and source of repayment as involving payment of interest and then a “bullet repayment from liquidation of fund”. Furthermore, in all cases but one they specify that what is being proposed to the credit committee represents an exception to credit policy. This material, the defendant says, justifies him in contending for the existence of a collateral agreement. He puts it this way at para. 12 in his affidavit of 26th November, 2013:-
“In any event, I can tell the court that, whilst the loan agreements purport to be for a defined term and provide for the repayment of capital, this was not the agreement between the parties but was a model used by Anglo for the purpose of their sourcing funds to lend to customers. Therefore, insofar as it is alleged that I am in default from the expiry of the terms in the loan agreements, this is not the case and I believe and am advised that his provides me with a full defence to the plaintiff’s claim. In this regard also, the plaintiff is estopped from maintaining this claim on the representations of Anglo and its employees.”
17. During the hearing, counsel on behalf of the defendant began argument in support of that latter assertion of promissory estoppel but that was abandoned by him. Thus, the only issue that falls for determination is whether or not the defendant has demonstrated a triable issue on his allegation of collateral contract.
Collateral Contract
18. Collateral contracts are dealt with by Chitty at para. 12.103 as follows:-

“Even though the parties intended to express the whole of the agreement in a particular document, extrinsic evidence will nevertheless be admitted to prove a contract or warranty, collateral to that agreement. The reason is that ‘the parol agreement neither alters nor adds to the written one, but is an independent agreement’.
Such evidence is certainly admissible in respect of a matter on which the written contract is silent. In a number of older cases it was stated that evidence of such a contract or warranty must not contradict the express terms of the written contract. However, more recently the courts have admitted evidence to prove an overriding oral warranty or to prove an oral promise that the written contract will not be enforced in accordance with its terms. Thus, in City Westminster Properties (1934) Limited v. Mudd, the draft of a new lease presented to a tenant contained a covenant that he would use the premises for business purposes only and not a sleeping quarters. The tenant objected to this covenant and the landlords gave him an oral assurance that if he signed the lease, they would not enforce it against him. The tenant signed the lease, but later the landlord sought to forfeit the lease for breach of this covenant. Harman J. held that the oral assurance constituted a separate collateral contract from which the landlords would not be permitted to resile. The collateral contract or warranty may be formal or informal even though the main contract is one which is required by law to be in or evidenced by writing.”

19. In Tennants Building Products Limited v. O’Connell [2013] IEHC 197, Hogan J. neatly summarised the modern case law on this topic as follows:-
“The effect of this case-law may be said to be that while the courts will permit a party to set up a collateral contract to vary the terms of a written contract, this can only be done by means of cogent evidence, often itself involving (as in Mudd and in Galvin) written pre-contractual documents which, it can be shown, were intended to induce the other party into entering the contract. By contrast, generalised assertions regarding verbal assurances given in the course of the contractual negotiations will often fall foul of the parol evidence rule for all the reasons offered by McGovern J. in Deane.”
20. Reference was also made to the decision of Finlay Geoghegan J. in AIB Plc v. Galvin [2011] IEHC 314 where she said:-
“I am using ‘collateral contract’ in the sense explained by Cooke J., in the Supreme Court of New Zealand in Industrial Steel Plant Ltd. v. Smith [1980] 1 N.Z.L.R. 545, at p. 555, quoting with approval from Cheshire and Fifoot on Contracts:

‘The name is not, perhaps, altogether fortunate. The word ‘collateral’ suggests something that stands side by side with the main contract, springing out of it and fortifying it. But, as will be seen from the examples that follow, the purpose of the device usually is to enforce a promise given prior to the main contract and but for which this main contract would not have been made. It is rather a preliminary than a collateral contract. But it would be pedantic to quarrel with the name if the invention itself is salutary and successful.’

It is clear that not every statement or promise made in the course of negotiations for a contract may give rise to a finding that a collateral contract exists. To be so treated, a statement must be intended to have contractual effect.”
21. All of these cases were, of course, decided on full oral hearings and not on applications for summary judgment.
22. It is clear that the courts have over the years on occasions accepted that in appropriate circumstances the terms of a written agreement may be affected by the existence of a collateral contract or warranty made between the parties. That is the case which is sought to be made here. Counsel for the plaintiff in reply sought to analyse very thoroughly the precise wording of the affidavit evidence from Mr. McCaughey and Mr. Drennan on this topic so as to demonstrate that it falls short of the “cogent evidence” referred to by Hogan J. and could better be characterised as general assertion. He also sought to raise the ability of Mr. Drennan to bind the Bank. Whilst ultimately these criticisms may well prove to be correct, it does not appear to me that I can, at this juncture, say that it is very clear that the defendant has not demonstrated a triable issue in respect of this allegation of collateral contract. There is his own sworn testimony, bolstered by Mr. Drennan’s and fortified by the material which was presented to the credit committee which material antedates the signing of the formal contracts in each case.

23. Given the low threshold of proof that is required to be established at this stage of the proceedings, I am of opinion that a triable issue has been raised as to the possible existence of a collateral agreement to the effect that the term of the agreements would be “for the duration of the funds”.

24. This line of argument could have been entirely precluded by the plaintiff by having in its contractual terms an “entire agreement” clause. These clauses have been commonplace for years and provide that the written agreement contains the entire and only agreement between the parties and supersedes all previous agreements and understandings respecting the subject matter of the contract. Furthermore, such clauses commonly contain an acknowledgement that when entering into the agreement, the borrower has not relied on any representation or undertaking whether oral or in writing save such as are expressly incorporated into the written document. Had such an “entire agreement” clause been incorporated into the conditions of the plaintiff, this line of argument would not have been available at all to the defendant.

25. Having concluded that a triable issue as to existence of a collateral contract which provided that the term would be for the duration of the funds thus not making the monies advanced repayable on demand, I now consider the consequences of that conclusion.

26. This collateral contract on the terms contended for by the defendant has its limitations. First, he accepts in his affidavit that it only applies to the first agreement, second agreement, third agreement, facility A and facility B and part of the fourth agreement. It has no relevance in relation to other parts of the claim.

27. Second, the term of the agreement under the collateral contract contended for was to be “for the duration of the funds” pace Mr. McCaughey or “the duration of the investment” pace Mr. Drennan.

28. The uncontroverted evidence is that the duration of some of these funds or investments has come to an end. Thus, insofar as the first agreement and facility A of the third agreement relating to the Woolgate is concerned, a receiver was appointed and the properties were sold as of February 2012. Insofar as the second agreement dealing with the New York Hotel Fund is concerned that fund has closed and from an economic and practical point of view is at an end. It is not, however, technically liquidated, a point to which I will return in a moment. Facility B of the third agreement EGPF still exists. The fourth agreement M&A Fund closed in September 2012. The fourth agreement EGPF Fund remains open as does the fourth agreement investment in Taurus Funds. Thus, even on the terms of the collateral agreement contended for, the defendant is liable to repay monies advanced in respect of those funds which have closed.

29. Counsel for the defendant in a valiant effort to try and avoid this conclusion sought to rely upon the reports to the credit committee which utilises the term “liquidated” in respect of such funds. He argued that until an actual liquidator was appointed to the fund, the loans did not become due. Apart from the fact that that is to put words into the mouth of Mr. McCaughey who made no such assertion in his affidavit nor indeed did Mr. Drennan, it is in my view in any event untenable and unrealistic and defies economic and business commonsense. It fails to meet even the low threshold of proof required at this stage of the proceedings.
Counterclaim
30. The defendant also asserts that he has a counterclaim, the existence of which provides a basis to set off any judgment obtained against him or alternatively, a basis for staying any judgment until such time as the counterclaim comes to trial.

31. It is in the replying affidavit of Mr. McCaughey sworn on 26th November, 2013, that one finds the principal basis for this counterclaim. The counterclaim asserts negligence, misrepresentation, negligent misstatement, breach of duty and breach of contract against the plaintiff. Powerful criticism was made, inter alia, of the paucity of information and lack of specificity in support of this assertion. However, there was a potential knock out point made by the plaintiff in respect of the alleged counterclaim.

32. Counsel for the plaintiff pointed out that even if one assumes the existence of such a counterclaim, it is time barred. The limitation period in respect of the series of wrongdoings alleged by the defendant is six years. Because the assertion is sought to be made in these proceedings, the defendant gets the benefits of s. 6 of the Statute of Limitations 1957, which provides:-

“For the purposes of this Act, any claim by way of set-off or counterclaim shall be deemed to be a separate action and to have been commenced on the same date as the action in which the set-off or counterclaim is pleaded.”
33. These proceedings commenced in July 2013. The last agreement in suit was on 28th March, 2007, and accordingly, any claim in respect of that should have been brought by March 2013. Thus, the purported counterclaim is time barred.
34. Counsel for the defendant was unable to refute that assertion other than in respect of the allegations of wrongdoing in the management of the funds. But that is clearly a complaint that can only be made against the manager of the funds. The manager was not this plaintiff but rather an insurance company, Anglo Irish Assurance Company. Thus, I am satisfied the plaintiff’s contention as to such counterclaim as there may be being statute barred is correct. Thus, even if there is a triable issue as to the existence of a counterclaim, it makes no sense to allow it to proceed when it is plainly statute barred and the defendant was unable to contend otherwise. That is sufficient to dispose of this aspect of the case. Nonetheless, I will consider the merits of the alleged counterclaim lest I am wrong on the limitation question.

35. Turning then to the substance of the counterclaim, it is to be found principally in the replying affidavit of the defendant sworn on 26th November, 2013.

36. Insofar as the first agreement and Facility A of the third agreement i.e. the Woolgate agreement is concerned, the defendant says at para. 20:-

“20. I maintain that the Woolgate Fund was mis-sold to me and it is my intention to defend the first loan and the third loan Facility A and to counterclaim on the basis that the plaintiff is guilty of, inter alia, breach of contract, negligence and breach of duty including breach of statutory duty, misrepresentation and negligent misrepresentation.
21. In particular, I would highlight the fact that it was represented to me prior to entering into the fund that the only mechanism by which I could invest into the fund was through a direct investment with the plaintiff. This is wrong and, in fact, a percentage of the fund was held by a joint venture partner of the plaintiff in the European Geared Property Fund which invested into the Woolgate Fund or at least the building itself.

22. In addition to this, the non recourse bank balance associated with the Woolgate Fund was stated to be 83.6% of the purchase price of the property. In fact, the actual purchase price of the property was GB£311m as opposed to GB£325m so that the debt level associated with the property was 87.5% instead of 83.6%. This is because there was a finder’s fee of GB£10.5m included as part of the acquisition costs. This had an effect on the fund as the loan covenant specified a maximum loan to value ratio 84% and the breach of the said covenant entitled the lenders to take control of the property and to act to protect their own interest such that the Woolgate Fund lost its control of the investment. Therefore, from the outset, the investors were not properly protected and this was a risk that was not expressed when it clearly existed. In addition to this, the senior financiers, Credit Suisse provided borrowings of €240m, which facility expired on 18th July, 2011, which was approximately five years of the investment when the fund was described to be for a term of between five and seven years.”

37. Insofar as these averments are concerned, it is important to point out that at no stage is there the slightest attempt made to indicate when, where, by whom and in what manner the representations contended for were made. Neither does the defendant attempt to say what the consequences of this alleged misrepresentation was. That is remarkable given the observations made by Birmingham J. in the defendant’s last piece of litigation before the courts where the defendant brought suit against the plaintiff in respect of the New York Hotel fund. There, that judge said:-
“I do not, at all, believe that Mr. McCaughey has been intentionally untruthful in making the statement that he has, but I do believe that statement is the product of hindsight and indeed of wishful thinking. This statement is undermined by the fact that Mr. McCaughey has also said that had he known about the interest rate strategy and about the long term tenants and the status of the renovation budget that he would not have invested. Indeed, it must be said the phrase ‘I would not have invested’ became something of a mantra. In my view no reasonable prudent investor who found the proposed investment otherwise attractive, is likely to have been dissuaded from investing by being told about the reality of the zoning issue.”
38. Even that mantra is not employed by the defendant in his evidence here.
39. As to para. 22, it is notable that the contract in question which is alluded to there was entered into with Anglo Irish Assurance Company which in the very brochure which is exhibited made it clear that it could not accept responsibility for any errors in the reports which were reproduced in that from external reports. Furthermore, that brochure made it clear that the defendant should get his own legal, financial and tax advice and it also contained a risk disclaimer. I am satisfied that the contents of these paragraphs in the defendant’s affidavit are mere assertion and that is not sufficient to tee up the counterclaim even to the low threshold of proof that has to be achieved.

40. Insofar as the second agreement is concerned i.e. the New York Hotel Fund this, as I have made clear, has already been the subject of litigation pursued unsuccessfully by the defendant. The claim was dismissed in ringing tones by Birmingham J. and upheld by the Supreme Court. This aspect of the alleged counterclaim is to be found from paras. 23 onwards in the affidavit.

41. In the earlier proceedings, the defendant in this action sought a declaration that the loan agreement in respect of the New York Hotel Fund should be rescinded. Notwithstanding his lack of success in that action, he seeks to rely on alleged mis-selling of the fund as a defence to the instant proceedings. This is what the defendant says:-

“23. The second facility letter dated 10th October, 2006, related to a facility of €620,000 to part fund my equity investment in the Peninsula Real Estate Fund No. 1 LP (hereinafter referred to as the New York Hotel Fund) for $1m of which €602,280.86 was drawn down. The security for this agreement was the same as the first agreement except that there was an additional assignment over my investment in the Anglo New York fund. Anglo’s Peninsula Real Estate Fund was the vehicle by which they structured the investment into the New York Hotel Fund.
24. The New York Hotel Fund was offered by Anglo and related to the acquisition of two hotels in New York being the Beekman and Eastgate and I beg to refer to the brochure upon which I have signed my name prior to the swearing hereof.

25. In relation to this fund, I issued proceedings entitled Gerard McCaughey v. Irish Bank Resolution Corporation and Mainland Ventures Corporation which proceedings were issued on 7th October, 2009 (hereinafter referred to as the defendant’s proceedings). In the defendant’s proceedings, I allege, amongst other things that I had been mis-sold investments and that Anglo was guilty of fraud and negligence on the part of the Bank. My claim against the Bank was dismissed by order of Mr. Justice Birmingham of the High Court on 27th July, 2011 and my appeal was unsuccessful and the Supreme Court delivered judgment on 13th March, 2013.

In the defendant’s proceedings, the plaintiff maintained a counterclaim which claim did not include the claim herein pursuant to the second loan. Separate to this, and by way of a final demand dated 10th March, 2010, the plaintiff sought to call in my facilities in relation to the second agreement.”
42. He then goes on to reproduce a letter from his solicitor of 12th March, 2010, and asserts that it, combined with para. 19 of the special endorsement of claim, gives rise to an estoppel because the plaintiff in these proceedings did not advance the claim on foot of the loan in that action. It is difficult to understand how this contention is made. Mr. Nester, the Bank’s witness in a replying affidavit makes it clear that arrears had arisen on the New York Hotel Fund loan and the Bank asked the defendant to pay these arrears which he did. In those circumstances, there was no basis to call in the loan or to seek judgment. I am satisfied that this estoppel point is of no substance.
43. Going on then to the second and alternative contention which is made, this is what the defendant says at para. 28 of his affidavit:-

“28. It is my intention to counterclaim as against the plaintiff for, inter alia, breach of contract, negligence and breach of duty (including breach of statutory duty), misrepresentation and/or negligent misstatement in relation to the New York Hotel Fund. There are issues that arose in the High Court proceedings and/or hearing and were not pleaded as issues and no determination was made in relation to them. In particular, I have learned since issuing the defendant’s proceedings that Anglo were involved in the manipulation of figures for the purpose of increasing the rate of return, which increased figures were then relied upon by Anglo for the purpose of selling the New York Hotel Fund to me.”
44. Over then next three paragraphs of the affidavit, the defendant alludes to matter which in my view quite clearly was dealt with by Birmingham J. in the course of his judgment. True it is that these issues were apparently raised without being pleaded or any notice of them being given in advance of the opening of that case. But it is quite clear from the terms of that judge’s judgment that, although objections were taken to them being raised at that late stage, he decided to allow them to be dealt with. Indeed, he dealt with the evidence and dismissed them. That is clear from the terms of his judgment. I do not propose to add to the length of this ruling by reciting at length from the judgment of Birmingham J. save to comment that he clearly gave great leeway to the defendant to run these points although not pleaded or notified to the other side in advance because he took the view that they had the potential to be of significance. When he reached his conclusions on them, he said:-
“While the diligence of the plaintiff and his legal team in locating the entries in the documentation which have been relied upon to advance these topics is to be commended, it must be said that some of the issues which appeared to have the potential to be of the greatest significance in fact turned out to be balls of smoke.”
45. I am of opinion that these averments cannot be the basis of a counterclaim having already being decided upon by Birmingham J. whose decision was affirmed by the Supreme Court.
46. At para. 35, a further issue is sought to be raised about the sale of the Beekman Hotel which it is difficult to understand and certainly in my view does not amount to a basis for any counterclaim.

47. This attempt to relitigate a matter already dealt with by the courts cannot form the basis for a counterclaim.

48. As to the third agreement, the defendant says at para. 38 of his affidavit that he has serious complaints in relation to the European fund. He says the fund was an investment for the purpose of acquiring investment properties throughout Europe and he refers to the brochure. All of these allegations which are contained at paras. 38 and 39, amount to assertion. Insofar as they amount to claims concerning the fund, it has to be borne in mind that the plaintiff was only involved at the point of sale of the investment or at the time when the investors went into it. Thereafter, the fund was operated by Anglo Irish Assurance Company. The defendant and other investors contracted with that entity and it was that entity that was the manager and custodian of the funds. Thus, insofar as there are complaints made about the manner in which they were managed or invested, they are not complaints which lie against the plaintiff.

49. Finally, insofar as the fourth agreement is concerned, there is a complaint which appears to be one of mis-selling but again it amounts in my view to mere assertion without any of the necessary detail being forthcoming.

50. I therefore conclude that the defendant has not demonstrated even on the low threshold of proof required, the basis for a counterclaim in respect of the various complaints which he has identified.

51. Even if I am wrong in that, as I have already made clear, such claims are in any event already statute barred.

52. Even if I am wrong in both of those conclusions and he does indeed have the basis for a counterclaim which is not statute barred, I would not in any event permit this counterclaim to be utilised for the purposes of staying execution on foot of the judgment to which the plaintiff is entitled.

53. The approach of the court on this topic has been dealt with by Clarke J. in Moohan v. S&R Motors (Donegal Limited) [2008] 3 IR 650. In my view, this is a case in which judgment should be entered on that part of the claim to which no defence has been demonstrated. Judgment should be refused in respect of the part of the claim to which a defence has been demonstrated. There should be no stay on the judgment to which the plaintiff is entitled. In exercising my discretion on this aspect of the matter, I take into account the factors identified by Clarke J. and conclude that the equities would not justify the plaintiff being deprived of the fruits of its judgment.

54. The net effect of this is as follows. The defendant’s alleged defence only applies to the first and second agreements and facilities A and B of the third agreement and part of the fourth agreement. So there will be judgment on facility C of the third agreement and the Riverdeep part of the fourth agreement and the fifth agreement in full. So, there will be judgment for €560,265.83, on facility C of the third agreement and judgment for €112,000 plus interest accrued in respect of the Riverdeep monies. There will be judgment for €1,266,319.62 on foot of the fifth agreement. This gives a grand total of €1,938,585.45.

55. The defence on the terms alleged by the defendant has no application once the duration of the investment has expired. That has happened in the case of closed funds. Thus, there will be judgment for a combined total of €1,885,028.94 in respect of the first agreement and facility A of the third agreement (the Woolgate facility). There will also be judgment on the second facility i.e. the New York Hotel Fund in the sum of €631,561.51 and there will also be judgment in favour of the plaintiff on the M&A part of the fourth agreement being €750,000 plus interest accrued. In respect of the balance of the claim, it will be adjourned to plenary hearing so as to enable the defendant to prosecute the line of defence pertaining to the existence of a collateral agreement. There will be judgment for €5,205,175.90.

 

O’Reilly v. Granville

[1971] IR 92

 

O’Dalaigh C.J. :
15 July

The plaintiffs in these separate proceedings are husband and wife. They were injured in a road accident which occurred near Greystones in County Wicklow on the 15th January, 1966. They were travelling towards Greystones in a van which was the property of the plaintiff (James O’Reilly) when, as he alleges, a car (Reg. No. CZI 904) came from the opposite direction, crossed the road and crashed into his van. Both plaintiffs were injured, and the van was damaged. The plaintiffs issued separate proceedings. In each case the originating summons was issued on the 18th December, 1968, and on the 4th January, 1969, service was effected on the defendant, Alexander Granville, personally;
he was then believed to have been the driver of car No. CZI 904. In fact, as it later turned out, the driver of the car was not Alexander Granville, but his son Desmond Granville.
A motion for the 30th June, 1969, was then brought in each action to add Desmond Granville as a defendant. Mr. Justice Murnaghan dismissed both motions, with costs, on the 28th July, 1969. The three-year period for bringing proceedings in an action for tort which is laid down9 in s. 11, sub.-s. 2, of the Statute of Limitations, 1957, had expired on the 16th January, 1969. Mr. Justice Murnaghan delivered an ex tempore judgment in the course of which, as appears from a note made by the court registrar, he was of the opinion that the matter was so clear that it would be a waste of time to grant the motions. Counsel for the proposed defendant had intimated to the judge that his client relied upon the Statute of Limitations, 1957, as a defence to the actions.
The submission for the plaintiffs is that the Statute of Limitations must be raised by pleading and that, therefore, the High Court should have allowed the motions and added Desmond Granville as a defendant, The rule dealing with adding parties is Order 15, r. 13, of the Rules of the Superior Courts, 1962. The rule says10 that no cause shall be defeated by reason of the misjoinder of parties, and it authorises the High Court to add a party as plaintiff or defendant. The rule concludes by stating that every party whose name is added as a defendant must be served with the summons and that the proceeding as against such party “shall be deemed to have begun only on the service of such summons or notice.” The other relevant rule is Order 19, r. 15. It requires10 a defendant to raise by his pleading all such grounds of defence as, if not raised, would be likely to take the opposite party by surprise or would raise issues of fact not arising out of the preceding pleadings; and the rule instances, inter alia,the Statute of Limitations.
Counsel for the proposed new defendant has supported the order of the High Court because, as he urged, the effect of adding his client as a defendant would be to deprive the client of his right to raise the Statute of Limitations. The underlying basis of this submission is that, if added now, the proposed defendant would be treated as if he had been a party when the proceedings were first issued. I have already cited the concluding words of Order 15, r. 13, which purport to fix the date of service of the originating summons as the date of the beginning of the proceedings against the new defendant. Even if these words of Order 15, r. 13, were intended only to regulate procedural matterse.g.,to fix a date as from which an appearance shall be entered in my opinion the position will be substantially the same as a matter of substantive law. An added party cannot be considered to have been a party to the proceedings earlier than the order giving leave to add. It would be contrary to the fact to hold otherwise; to operate retrospectively the court’s order would, in my opinion, require statutory support.
I find nothing in the Rules or in substantive law which would restrict the proposed defendant’s right to raise the Statute of Limitations if added as a party, and by this I mean that the defendant’s rights to plead the statute (such as they are) cannot be affected adversely by being added as a party now.
Counsel for the proposed defendant urged that there is English authority, albeit of the Court of Appeal, for the proposition that the court will not add a defendant if thereby the defence of the Statute of Limitations would be defeated: Mabro v. Eagle Star and British Dominions Insurance Co. 11 That case was an application to add a plaintiff. There are two judgments. Scrutton L.J. said at p. 487 of the report:”The Court has never treated it as just to deprive a defendant of a legal defence. If the facts show either that the particular plaintiff or the new cause of action sought to be added are barred, I am unable to understand how it is possible for the Court to disregard the statute.” Greer L.J., who concurred, said at p. 489 of the report:”The objection to joining him was that if he were joined and treated as a plaintiff as from the time the writ was issued the defendants would be deprived of the benefit of the Statute of Limitations.” [The italics are mine.] The ground specifically taken in the judgment of Greer L.J. is unacceptable to me for the reasons that I have already stated: I cannot agree that an order adding a new party can be retrospective in its effect. As to the judgment of Scrutton L.J., he says that he is unable to understand how the court can disregard the statute. The answer to this objection, in my opinion, is twofold. First, the statute is not disregarded because the added party’s rights are not affected and, secondly, the statute is required to be specifically raised by pleadingthe Rules say so. It is well-established law that a statute of limitations which merely bars the plaintiff’s remedy must be disregarded unless pleaded in a defence; it is only a statute of limitations which extinguishes the plaintiff’s right which can be relied upon without being pleaded.

Lightwood on Limitations (1909) summarises the law at p. 3 in the following passage:”Some statutes, such as the Real Property Limitation Acts, 1833 and 1874, so far as they apply to real estate, operate by extinguishing the former owner’s title; others, as the Limitation Act, 1623, bar his right of action only, but leave his substantive right intact, so that he is at liberty to avail himself of it by any means which do not require him to take proceedings to enforce it. This distinction has an important result as regards procedure. When a plaintiff is seeking to assert a title which has been extinguished by the statute, the defendant is not bound to plead the statute in his defence; when, on the other hand, the plaintiff’s remedy only is barred, the defendant cannot set up the statute unless he has specially pleaded it. ‘The necessity to plead a Statute of Limitations applies to cases where the remedy only is taken away, and in which the defence is by way of confession and avoidance; not where the right and title to the thing is extinguished and gone, and the defence is by denial of that right’: per Patteson, J., in De Beauvoir v. Owen ;(1850) 5 Ex. p. 177; Re Burge: Gillard v. Lawrenson (1887), 57 L.T. 364.” Section 11, sub-s. 2, of the Statute of Limitations, 1957, does not purport to extinguish the plaintiff’s right: it purports merely to bar the plaintiff’s remedy.
Therefore, I would allow the appeal and grant leave to add Mr. Desmond Granville as a defendant in each action. It is not to be assumed too readily that, in the circumstances of this case, Mr. Desmond Granville will be advised to rely upon the Statute of Limitations when a defence comes to be filed.
The circumstances to which I refer are unusual and I propose to summarise them shortly. The plaintiff’s solicitors, Messrs. Maher & Sons, wrote on the 25th January, 1966, less than a fortnight after the accident to the manager of the Sun Insurance Company of No. 9 College Green, Dublin, as the insurers of the car CZI 904. The solicitor’s information then was that the owner of the car was a Mr. John Brady. The reply of the Sun Insurance Co., which is dated the 27th January, 1966, was admitted in evidence in the High Court without objection, although it was marked “without prejudice.” Later correspondence, similarly marked, was also admitted in evidence without objection. The insurance company asked for a note of the injuries suffered by Mr. and Mrs. O’Reilly and inquired where the car could be inspected. This information was furnished by the plaintiffs’ solicitors by letter of the 1st February. It appears that the insurance company then requested a medical examination, and this was duly arranged for the 6th April. Later, in the same month, the insurance company inquired the name of the plaintiff’s insurance company; this information had been furnished earlier by the plaintiffs’ solicitors; it was furnished again without delay. A second medical examination of the plaintiffs was sought, and this took place on the 3rd November, 1966. On the 18th November the plaintiffs’ solicitors wrote to the Sun Alliance Insurance Group reminding them that they had had an up-to-date medical examination of the O’Reillys, and inquiring when they would be in a position to deal with the case. The letter concluded as follows:”We have issued a High Court Summons [sic] in this case and we are arranging to serve them on Mr. Granville unless his solicitor gets in touch with us and agrees to accept them and enters an appearance.” The Mr. Granville referred to in the letter is Mr. Alexander Granville.
Subsequent to the opening of the correspondence the plaintiffs’ solicitors had obtained a Garda report in which Mr. Alexander Granville’s name was given as that of the owner and driver of the car CZI 904. The plaintiffs’ solicitors, not having had a reply to that letter of the 18th November, sent a reminder on the 28th November. The Insurance Company replied on the 1st December, 1966, explaining the reason for the delay and requesting details of the plaintiffs’ special damages and they added “we shall see if we can arrange a settlement with you.” A reminder from the insurance company repeating the request for details of special damages was sent on the 15th December. On the 10th January, 1967, the insurance company inquired of the plaintiffs’ solicitors by letter how much the plaintiffs expected to be paid in settlement of their claims apart from special damages, which (the letter added) “no doubt can be agreed by negotiation.” The plaintiffs’ solicitors on the 12th January, 1967, promised a reply after consultation with their clients who were then away. On the 7th February these figures were furnished, as follows: Mr. O’Reilly £2,000; Mrs. O’Reilly£1,500. On the 10th February the insurance company wrote to say they would consider the matter carefully and would be in touch as soon as possible. There is then a cesser of correspondence; it was stated in the High Court that negotiations were carried on verbally in the interval.
The next letter was written on the 24th October, 1968, by the plaintiffs’ solicitors who said that their clients had had all the medical treatment which would be of any benefit to them and that they hoped to have a final report in a few days and would then be in touch with the insurance company. A reply was received from the Sun, Alliance and London Insurance Group dated the 27th January, 1969; it will be noted that the three-year period for proceedings against the driver, Mr. Desmond Granville, expired on the 16th January, 1969. This letter read as follows:”We refer to previous correspondence in the above matter and would advise that we would now like to arrange an up-to-date medical examination of both your clients. Please confirm that it is in order for us to do so on the normal terms.” The next letter is a letter of the 31st March, 1969, from the plaintiffs’ solicitors to the defendant’s solicitor. From the terms of that letter it may be inferred that in the interval the point has been raised, for the first time by the Sun, Alliance & London Insurance Group, that the plaintiffs’ proceedings were not maintainable because Mr. Alexander Granville, the defendant, was neither driver nor owner of the car.
The letter of the 31st March is as follows:
“Dear Mr. Gleeson,
With reference to this matter I have had consultations with Oliver Gogarty, S.C. and with Mr. John Coleman, B.L. I trust that you would agree that you would act and the insurance company did act in this case on the assumption that negligence could and would be proved on the part of the driver of the car owned by Mr. Granville. We feel that it would be established that the defendant is the owner of the car. This appears on the Garda report, and he is and has always been as far as we are able to ascertain the practical owner of Syntheses Limited. Taking these facts into consideration, and we trust that they would not be disputed, we would refer you to a case of Cohen v. Snelling reported in All England Law Reports 1943 (Vol. 2 at p. 577), copy of which we enclose. You will see that in this case two of the judges delivering judgment considered that where liability was admitted that it would be discreditable if not dishonest on the part of any insurance company to plead the Statute of Limitations to avoid liability, and the third judge agreed on the verdict. We would be obliged if you would put these matters before your clients and see whether they would now be prepared to come to a settlement on the matter. Needless to say it would be great personal assistance to me; we feel settlement could be reached at an earlier stage in the matter.”
The correspondence closes with a reply of the 13th June, 1969, from the defendant’s solicitor in these terms:
“Sirs,
I apologise for the delay in answering your letter of 31st March but I had to get full instructions on the matters contained in your said letter. The insurance company have informed me that although Mr. Alexander Granville held some shares in the company, he was not the holder of a major interest in the company. I understand that in 1965, out of a total of 1,000 ordinary shares and 4,500 cumulative preference shares, Mr. Granville held 500 of the former and none of the latter. My instructions are that it was since the accident, on some reorganisation of the share capital following the resignation of a Mr. Murray, that Mr. Granville attained his present interest in the company. The insurance company have, therefore, it would seem to me, correctly made the point, that the Garda report mistakenly described Mr. Granville as the owner of the car. I have read your reference to the case in the 1943 All England Law Reports, Vol. 2, page 577. According to my instructions, the facts of the present case are clearly distinguishable from the facts in that case. I regret that my instructions are to rely on the Statute. At no stage was there an admission of liability in this case, and I am instructed that any negotiations that were carried on, were carried on without prejudice.”
At an early stage in the correspondence the insurance company introduced Syntheses Ltd. into the title of the correspondence as defendants as being, apparently, the owners of the car. The story would not be complete if it were not recorded that when Mr. O’Reilly, after the accident and notwithstanding his injuries, inquired who was the driver of the car which had collided with his van he was told it was no business of his.
I have taken the trouble to set out at length the negotiations which have taken place in this case between the plaintiffs’ solicitors and the Sun, Alliance & London Insurance Group. I beg leave to doubt whether the Sun, Alliance & London Insurance Group can yet have had an opportunity to consider at a high level the picture thus disclosed, and I further doubt whether consideration can have been given, at the same high level, to a decision to terminate those negotiations with an intimation that legal proceedings were now statute barred. From the earliest moment the plaintiffs’ solicitors have furnished the defendant’s insurers with the fullest particulars and have co-operated with them in every way, and not least by not pressing forward with legal proceedings. The defendant’s insurers have been in no way prejudiced; quite the contrary. A plea of the Statute of Limitations, in the circumstances, would be not only wholly unmeritorious but, I feel it my duty to add, unconscionable and plainly dishonest.
It should be remembered that, as stated earlier in this judgment, the Act of 1957 does not purport to extinguish the plaintiffs’ rights; the Act merely empowers a defendant to bar the enforceability of those rights.
It is not now appropriate to offer any opinion on the submission made on the plaintiffs’ behalf that Mr. Alexander Granville is now estopped, by the negotiations conducted on his behalf by the said insurance group, from denying that he was the driver of car CZI 904; the necessity to do so may well never arise.

WALSH J. :
The facts of this case have been so fully set out in the opinion which has just been expressed by the Chief Justice that I find it unnecessary to refer to or repeat any of them. The application is to add a defendant to proceedings already brought. That there is power to do so cannot be in any doubt. The matter is expressly covered by Order 15, rr. 13-15, of the Rules of the Superior Courts.
The actions, in which these motions were brought, were commenced before the expiration of three years from the date upon which the cause of action accrued. In my opinion, the adding of a defendant is not the bringing of a new action but is a step in an existing action. The provisions of r. 13 of Order 15 to the effect that every party whose name is added as a defendant shall be served with a summons or notice, and that the proceedings against such party shall be deemed to have begun only on the service of such summons or notice, relate only to determining the point from which the times for entering an appearance and a defence etc. shall be measured. It is significant that this particular provision relates only to the adding of a defendant. This exception indicates that it was never within the contemplation of the rule that, in effect, the adding of a new party in general would be equivalent to the commencement of an action in respect of that party. If it were otherwise, the position arising on the addition of a plaintiff would produce a very anomalous result. In so far as the Statute of Limitations is concerned, the addition of a plaintiff after the expiration of the limitation period appropriate to the particular cause of action could be just as embarrassing for the defendant as the addition of a defendant after the expiration of the same period, and yet the rule omits any reference to the proceedings having been begun only upon the addition of such new plaintiff so far as the defendant is concerned. In my view, the provisions of r. 13 of Order 15 give no support to the defendant’s contention.
If a party is joined either as a plaintiff or as a defendant to an action already begun then that party must be treated as having been a party from the time the action was commenced. Otherwise there would be created a completely unreal situation of one action being treated as divisible into several actions, of which one or more was commenced at a different time from the other or others.
It is my opinion that when an application of this nature comes before a judge and it is indicated to him, in opposition to the application, that the party opposing it would wish to raise the Statute of Limitations or would do so if a separate action were begun in respect of the applicant, it is a matter for the judge then to consider whether on the facts of the case justice would be served by adding the party or not. If, in the result, the judge takes the view that justice would be served by adding the party, then he should order accordingly even though the result might be to effectively deprive the opposing party of the benefit of the Statute of Limitations. The Statute of Limitations does not exist for the purpose of aiding unconscionable and dishonest conduct, and I fully agree with the view expressed by the Chief Justice that, in the circumstances of this case, if the Statute of Limitations were to be invoked it would be for the purpose of sustaining and maintaining unconscionable and dishonest conduct.
In my view, the reasoning which moved this Court in its decision in Baulk v. Irish National Insurance Co. Ltd. 12 is applicable to this case also. As was pointed out there, at p. 72 of the report, the defendants were aware from the very beginning of the plaintiff’s intention to sue them. The same position exists in the present case which also has the added ingredient in that here the defendant’s representative misled the plaintiffs. In Baulk’s Case 12 the view was expressed that it would be an injustice to the plaintiff in that case to employ the Rules of Court for the purpose of preventing him from proceeding with his action. In the present case it would be an injustice not to employ the Rules of Court to enable the plaintiffs to join the proposed defendant in the action (which was itself commenced within the permitted time) when there is now no other course open to the plaintiffs which would enable them to have their claim against the proposed defendant determined. For these reasons I would allow these appeals.

BUDD J. :
The proceedings herein arose out of a collision between two motor cars on the 15th January, 1966, at Wingates Hill between Bray and Greystones. The plaintiff was driving a Volkswagen van owned by him and he claims damages for personal injuries sustained in the collision which injuries, he alleges, were caused by the negligence of the defendant. The other car was an Austin. It was thought at the time when the proceedings were commenced that the Austin was owned and driven by the defendant, Alexander Granville. Doubts having afterwards arisen as to whether the present defendant was the proper person to sue, either as the owner or as the driver of the Austin car, a motion was brought in the High Court to add one Desmond Granville (who is the present defendant’s son) as a defendant. The motion was refused and this appeal is taken against the order made in the High Court.
There was a somewhat tangled background to the bringing of the motion. The plaintiff says that his reason for suing the present defendant was that he was misled by the Garda report of the accident. The report is dated the 24th May, 1966, and it stated that the present defendant was the owner and driver of the Austin car at the time of the collision. Apparently it was later discovered that Garda James O’Brien had made a statement on the 23rd May, 1966, in which he stated that when he arrived at the scene of the accident on the 15th January, 1966, he spoke to Desmond Granville who, the Garda said, had been driving the Austin car CZI 904. When this information came to light it prompted the bringing of the motion.
I should add here that it would seem to me that there may still be some doubt as to who was the driver. Garda O’Brien, who investigated the circumstances of the accident and from whom the information stated in the report must have come, appears to have been supplied with incorrect information by either Desmond Granville or somebody else since the report and his statement are quite inconsistent on the question as to who was the driver of the car. Further, he states in his report that the car was owned by the present defendant, but it would appear from an extract from the registration particulars of the car that a company named Syntheses Ltd. was at any rate the registered owner of the car. It would appear that at the time of the accident the present defendant was an owner of some shares in that company, and that he now has a much larger holding in it. We do not know under what terms and conditions the Austin car was being driven by the present defendant or by Desmond Granville, as the case may be. No doubt as the action proceeds the precise facts can be discovered, if necessary by interrogatories or by discovery.

The proceedings were commenced by plenary summons dated the 18th December, 1968, and in that summons Alexander Granville was named as defendant. I should add that the plaintiff’s wife, who was a passenger in the Volkswagen van, was injured in the accident and she has also brought proceedings against the present defendant. Such decision as is given on the present motion will also rule her case. In the state of affairs then existing the plaintiff, by notice of motion dated the 17th June, 1969, sought an order amending the proceedings by adding Desmond Granville as defendant, and amending the plenary summons herein and giving leave to serve the added defendant with the summons.
Since the accident occurred on the 15th January, 1966, it was submitted on behalf of the proposed new defendant that the Statute of Limitations, 1957, had already run in his favour and against the plaintiff pursuant to the provisions13 of s. 11, sub-s. 2 (b) of the Act of 1957, which provide that an action of this kind”shall not be brought after the expiration of three years from the date on which the cause of action accrued.” The granting of the order was opposed mainly on the grounds that the statute had already run in favour of the proposed new defendant and that, therefore, it would be pointless to add him as a party. The plaintiff’s main contentions in brief were that in the circumstances of the case the statute did not apply, that in any event the learned judge did not have before him the necessary facts and material to enable him to decide the issue as he did and, further, that the point as to the application of the statue was made prematurely.
The motion was brought under the provisions14 of r. 13 of Order 15 which, after providing that no cause or matter shall be defeated by reason of the mis-joinder or non-joinder of parties, enables the High Court to add the name of any party who ought to have been so joined as a defendant.
The grounds for submitting that in the particular circumstances of the case the statute should be held not to apply against the plaintiff in favour of the proposed new defendant were that during negotiations for a settlement there had been an admission of liability, express or implied, which had the effect of preventing the application of the statute as against the plaintiff. It was submitted on behalf of the defendant and proposed defendant that there had been no such admission of liability. All that had occurred, the defendant and proposed defendant submitted, was that only the usual negotiations for a settlement had taken place between the parties with a view to settling the case, and no more. The learned judge took the view that all relevant matters which would enable him to decide the issue were fully before him on the hearing of the motion. I should say that I do not agree with this, and I shall return to the point later. He took the view that there was no admission of liability and that, accordingly, the statute would apply so that there would be no point in adding the proposed new defendant. Accordingly, he refused to make the order sought.
I should state before proceeding further that the negotiations referred to took place between the solicitors for the plaintiff and the solicitors for the insurance company which had issued a policy of insurance to Syntheses Ltd., the owners of the Austin car. The insurance company, of course, acted in the negotiations for the present defendant and Syntheses Ltd. but it was also conceded during the hearing in this Court that the conduct of the insurance company during the negotiations was conduct binding Desmond Granville, who is the person that the plaintiff wishes to add as a defendant presumably on the basis that the policy in the ordinary way covered the driver of the car.
One particular point was raised on this appeal which it will be convenient to deal with straight away. It was as to the meaning and effect of the latter part of r. 13 of Order 15. After providing for the service of a summons on the party added, the rule ends with the words:”and the proceeding as against such party shall be deemed to have begun only on the service of such summons or notice.” It was suggested that if the action were to be deemed to have begun as against the proposed new defendant only on the date of the service of the summons on him, then there was no point in adding him as a defendant because the position with regard to him at that date would be, by reason of the wording of the rule, that the action as against him would already have been barred by the previous expiration of the statutory limit of time. It would seem to me, however, that this contention overlooks the aim and object of Order 15 which is to ensure that all the proper parties are before the court so as to enable full justice to be done between the parties who are really interested in the matters at issue having regard to the nature of the proceedings and the granting of appropriate relief in the circumstances of the case. The order thus deals with procedural matters connected with the substitution or addition of parties. Therefore, it would seem to me that r. 13 is concerned only with the fixing of a time for the commencement of the proceedings from a procedural point of view. It is designed to deal with the time when the proceedings shall be deemed to have commenced with a view to fixing the times for the delivery of pleadings, and like documents, so as to have the proceedings in proper form for the trial and to enable the matters at issue to be properly determined between the proper parties. It is not designed to have, and does not have, any effect that would amount to altering or affecting the substantive legal rights of the parties to an action. In particular, it cannot take away the right of a plaintiff to proceed with an action, where it is pleaded or alleged that the statute has already run against him, when it is his contention that for some reason the statute does not apply to the case at all. Likewise the rule does not put the defendant in such an action in the position of being enabled to rely upon the statute in a case where he would otherwise not be entitled to rely on it. To say otherwise would amount to altering, or taking away, the plaintiff’s legal rights and this could only be done, in my view, by an Act of the legislature. Therefore, it would seem to me that r. 13 of Order 15, if availed of to add the proposed new defendant, does not (by reason of its containing the words quoted) have the alleged operational effect in law of barring the plaintiff’s claim or of preventing the plaintiff from arguing that in the circumstances of the case the statute does not apply to bar his rights. That being so, then r. 13 does not have the effect of rendering it futile to add the proposed defendant as a party and there is nothing in the rule to prevent the Court from adding the proposed defendant as a party if it sees fit otherwise to do so.
However, it was submitted further on behalf of the defendant and the proposed defendant that, even if the wording of Order 15, r. 13, did not render it futile to add the proposed defendant as a party, for another reason it would still be wrong to add him as such because the effect of adding him as defendant would be to destroy in another way his right to rely on the statute. This was put on the basis that the addition of the proposed defendant as a party to the action would take effect retrospectively so that he would be treated as having been a defendant from the commencement of the action, when the statutory period had not yet expired, with the result that he would be unable to rely on the statute.
In support of this argument reliance was placed upon the decision in Mabro v. Eagle Star and British Dominions Insurance Co. 15 and, in particular, on part of the judgment of Scrutton L. J. at p. 487 of the report. That case was concerned with an attempt to add a plaintiff, but the proposed defendant submits that the principles involved are equally applicable to the present case. The decision was to the effect that under the then current English Order 16, r. 2, the court would not allow a person to be added as plaintiff in an action if a defence based on the Statute of Limitations would be thereby defeated. That rule provided as follows:”Where an action has been commenced in the name of the wrong person as plaintiff, or where it is doubtful whether it has been commenced in the name of the right plaintiff, the Court or a Judge may, if satisfied that it has been so commenced through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms as may be just.”
The words used by Scrutton L.J. at p. 487 of the report were as follows:”In my experience the Court has always refused to allow a party or a cause of action to be added where, if it were allowed, the defence of the Statute of Limitations would be defeated. The Court has never treated it as just to deprive a defendant of a legal defence. If the facts show either that the particular plaintiff or the new cause of action sought to be added are barred, I am unable to understand how it is possible for the Court to disregard the statute.” It would appear from the judgment of Greer L.J. that the reasoning behind the decision was that an order providing for the addition of the proposed plaintiff as a party in that case would have had the retrospective effect of treating him as a party from the time when the writ was issued, so as to defeat the operation of the Statute of Limitations in favour of the defendant.
However, I fail to see why the addition of the proposed defendant as a party to the proceedings should have any retrospective or any other effect which would have the result of depriving him of his legal right to rely on the Statute, if he has such right. As I have already said, it would require an Act of the legislature to deprive the present or the proposed defendant of their respective legal rights to rely on the statute. It will still be open to the proposed defendant, if added as a party, to plead the statute and an issue will then arise as to whether it is or is not applicable in the circumstances of the case.
However, it would seem to me that Scrutton L.J. really based his decision on the grounds that the proceedings in that case were on the facts barred in law at the time that the motion was brought. If it were apparent beyond doubt that the statute applied to this case, an application to add the proposed defendant as a party might very well be refused as being a futile operation; but that is not the position here. The plaintiff says that there are adequate grounds for contending that the statute could not be relied on in favour of the added defendant because there was to be implied from the nature of the negotiations, which took place between the parties, an admission of liability from which it should be inferred that there was an implied agreement or contract that the statute would not be pleaded or relied on by the defendant or proposed defendant; and he submits that they are thus debarred from setting up any defence based upon a limitation of time for the commencement of proceedings under the provisions of s. 11, sub-s. 2 (b), of the Act of 1957. The plaintiff relied for this proposition on a decision of the Court of Appeal in England in Lubovsky v. Snelling. 16 That was a case under the Fatal Accidents Act, 1846, where proceedings were not commenced until more than twelve months after the date of death. It was held that, since liability had been admitted, the defendants were barred from setting up any limitation under the Fatal Accidents Act. The plaintiff in this case says that there were lengthy negotiations between his solicitor and his assistants on the one hand and the insurance company whose policy covered the driving of the Austin car on the other hand, and that these consisted of exchanges of letters and telephone conversations. It was pointed out that in the course of these negotiations arrangements were made for medical examinations of the plaintiff at the request of the defendant, and that one of them was sought after the date on which it was alleged that the statute had run, and that there would have been no need to seek it unless liability was admitted. The plaintiff submits further that it is clear that the only object of the negotiations was to arrive at an agreed amount for damages, and that in fact the negotiations resulted in an offer being made. I also observe that Mr. John B. Harte, an assistant solicitor in the office of the plaintiff’s solicitors, swears in paragraph (4) of an affidavit sworn on the 25th July, 1969, that the only question to be decided was the amount to be paid in satisfaction of the claim and, furthermore, he stated that at no time during the discussion was liability denied. After this affidavit of Mr. Harte had been filed no affidavit denying these allegations was filed on behalf of the defendant. The plaintiff submitted in this Court that, as in Lubovsky v. Snelling 16, there is also in these proceedings an admission of liability to be implied from the nature of the negotiations in the surrounding circumstances and from what passed between the parties. The plaintiff also says that he would wish to argue further that in the circumstances there has been a waiver by the defendant and proposed defendant of any right to plead the statute and, further, that they would be estopped from doing so.
Having regard to the fact that there was not before the learned judge any oral evidence as to the precise nature of the negotiations, so that he had no means of correlating it to the correspondence and seeing how the spoken word might affect the construction of the correspondence from the point of view of drawing any conclusions from the negotiations as a whole, it would seem to me that the learned judge had not the full facts before him nor the means of arriving at the true intentions of the parties. Therefore, he was not in a position to make any firm finding that the statute applied in favour of the proposed defendant and this case is clearly distinguishable from the Mabro Case .17, These full facts, which are not before this Court either, can only be elicited during the hearing of the proceedings before a judge and jury and after the proposed new defendant has been added.
I should not conclude my observations on this branch of the case and in particular my reference to Lubovsky v. Snelling 18without referring to the case of The Sauria 19 where, although there was an unqualified admission of liability by the defendants, it was held that there was nothing in the correspondence which amounted to a binding contract to waive the right to plead the statute if the plaintiff did not start proceedings until the statutory period had run out. The question as to whether there was consideration to support the contract also arose in that case. It maybe that in this case consideration is provided by an agreement, express or implied, on the part of the plaintiff not to take further steps in the action which would involve the defendants in further costs while the negotiations were still going on. The Sauria 19undoubtedly shows that there are arguments to be advanced against the applicability of Lubovsky v. Snelling 18 to this case and against the submissions of the plaintiff that the statute should not be held to operate against the plaintiff. However, that does not detract from the plaintiff’s submission that he has made a prima facie case on the issue as to the application of the statute and that the issue can only be determined after the statute has been pleaded and the facts have been fully investigated and elucidated before the court. Therefore the motion should not have been dismissed at this stage of the proceedings on the grounds that the statute had already run in favour of the proposed defendant and had debarred the plaintiff from succeeding. There are also other reasons why this course should not have been taken in the court below.
A further point made on behalf of the plaintiff, as a ground for contending that the decision of the court below cannot be allowed to stand, is that the contention that the statute had barred the plaintiff’s proceedings as against the proposed defendant was taken prematurely in the High Court because it had not then been pleaded; it was said that the point could not be taken properly until the hearing of the action, in that the statute is a matter of defence. It may or may not be pleaded and the matter of the application of the statute does not arise for consideration until it is raised. It was submitted, first, that the wording20of s. 11, sub-s. 2 (b), of the Act of 1957 clearly shows that it is the remedy which is barred, and not the right which still continues to exist. In support of this construction it is to be noted that the relevant portions of the old Statutes of Limitation covering cases in tort are in the same form as the Act of 1957 as will be seen in Chapter IV of the 1909 edition of Lightwood on Limitations, and it has long been settled that the effect of these statutes is to bar the remedy and not to extinguish the right It was then further submitted that in cases where the statute in question only bars the remedy and does not extinguish the right, the relief or defence given by the statute does not operate until pleaded. That is the view taken in the same edition of Lightwood on Limitations at p. 3 where the following words of Patteson J. in De Beauvoir v. Owen 21 are quoted:”The necessity to plead a Statute of Limitations applies to cases where the remedy only is taken away, and in which the defence is by way of confession and avoidance; not where the right and title to the thing is extinguished and gone, and the defence is by denial of that right.”I agree with these submissions and take the view that the point as to the applicability of the statute was taken prematurely in the court below.
Mr. Gogarty had originally taken the attitude that, when the proposed defendant had been added, a preliminary issue could then be tried as to whether or not the statute could be relied on in the circumstances. On further consideration in this Court he took the view that the proper course was for the proposed defendant to be added, and that after the pleadings were completed the action should go for trial in the ordinary way before judge and jury, and that the point as to the application of the statute could be decided during the trial. This was on the basis that a point of this nature, which depended upon the determination of disputed matters of fact as well as on points of law, could not be dealt with as a preliminary point before the hearing in an action such as this. Counsel relied upon the decision of this Court in Kilty v. Hayden 22 as supporting this proposition. In that case the High Court had directed the trial of a preliminary issue as to whether the driver of a car, which had been involved in a collision causing the death of the plaintiff’s husband, was an agent of the defendant and acting within the scope of his authority at the time of the accident. The Court was of the view that the rules of court did not provide for the trial of such a preliminary issue where the facts giving rise to the point of law involved were in dispute between the parties, and where the parties were entitled as of right to a trial by jury. It was submitted that that case ruled these proceedings and that the preliminary issue, as to whether the statute applied or not, should not have been decided by the High Court because the facts necessary to determine the issue were undetermined and in dispute; and it was submitted that the issues of fact could only be determined by a jury in a case such as this where the parties were entitled as of right to a jury. I agree with the submission and take the view that it was not open to the learned judge to make any adjudication on the disputed facts as to the alleged admission of liability.
Having regard to the views which I have expressed I am satisfied that this appeal must succeed. Rule 13 of Order 15 does not in any way render it pointless to add the proposed defendant as defendant, nor does it destroy his right to rely upon the statute if and when pleaded. The learned judge did not have before him the full facts (which have yet to be determined) and was not entitled to refuse the order sought on such material as was before him, particularly as the facts were in dispute. The plaintiff has made a strong prima facie case to support his contention that the statute does not apply against him by reason of an implied agreement not to rely on it or by reason of waiver or estoppel, and he is entitled to have the matter determined at the hearing of the proceedings. Moreover, the ruling of the learned judge was premature. The statute is a matter of defence and does not arise as such until pleaded and it was not open to the judge to rule as he did at this stage of the proceedingsparticularly when the facts were still in issue.
In my view, the order under consideration before the Court on this appeal cannot be allowed to stand. I would reverse the decision of the court below and allow this appeal. In lieu thereof an order should be made giving leave to the plaintiff to add Desmond Granville as a defendant to the proceedings and also to amend the plenary summons herein. I would also give leave to serve the added defendant with the summons if necessary, but this appears to be provided for under the terms of r. 15 of Order 15. Mr. Gogarty also said that he would wish to have Syntheses Ltd. added as defendants as well. The matter was not argued but, if there is no valid objection to this course, I would accede to such an application. It is in the interests of all concerned to have all matters at issue determined at the one time.

Leisure Management Corporation Ltd v AIG Europe (Ireland) Ltd

[2009] IEHC 365
JUDGMENT of Mr Justice Michael Peart delivered on the 17th day of July 2009:

By Notice of Motion dated 17th July, 2008 the plaintiff seeks an order pursuant to Order 15, rule 13 of the Rules of the Superior Courts adding two companies, Genport Limited and Calla Associates Limited, and one Christopher O’Reilly, as plaintiffs to these proceedings. The two companies are wholly-owned subsidiaries of the plaintiff company, and Mr O’Reilly was at relevant times an employee of one of them.

The defendant company is an insurer with whom the plaintiff took out a policy of insurance to cover certain liabilities in connection with its businesses. The defendant has repudiated liability for certain sums in respect of which the plaintiff has sought to be indemnified. Those sums arise from an award of damages and costs against Genport Limited and an award of damages and costs against Calla Associates Limited in two separate actions.

In these proceedings the plaintiff seeks a declaration that the defendant is liable to indemnify the plaintiff in respect of these sums, and for judgment for the amount thereof.

While the policy of insurance was taken out by the plaintiff, the plaintiff alleges that both Genport and Calla are insured parties under the policy, and that the indemnity covers those parties’ liabilities, in addition to any liabilities of the plaintiff itself. The plaintiff’s Reply to Notice for Particulars informs the defendant of this, and indicates an intention by the plaintiff to have those two companies added as plaintiffs.

The Defence delivered by the defendant in which it is pleaded that under the terms of the policy “that in the event of the defendant disclaiming liability of any claim and such claim not being within twelve calendar months from the date of such disclaimer referred to arbitration under the provisions of the Policy of Insurance then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable.”

Accordingly, as the defendant disclaimed liability on the 17th January, 2006 and 6th August, 2001 respectively, the defendant pleads that each claim has been abandoned and irrecoverable under the policy.

It is pleaded, without prejudice to the foregoing, inter alia, that since the sums sought under the policy are sums for which Genport and Calla are liable, and not the plaintiff, the latter is not entitled to the reliefs claimed in the proceedings.

It is in these circumstances that the plaintiff seeks to join the two companies.

Christopher O’Reilly is a person whose interest is also noted on the policy, and it appears that he was a manager or other employee of the two companies, and as appears from a further affidavit filed, the judgment against Genport was also against Mr O’Reilly on a joint and several basis.

In a replying affidavit on the present motion, the defendant’s solicitor, Gavin Carty, refers to the fact that it took two motions by the defendant before the plaintiff eventually delivered its Statement of Claim, and that Replies to Particulars were not delivered until after a further motion was brought by the defendant to compel the plaintiff to furnish Replies to Particulars. He refers also to the fact that as early as June 2006, within a short time of the issue of these proceedings, he had written to the plaintiff’s solicitor querying the plaintiff’s entitlement to bring these proceedings in circumstances where a liability was incurred by Genport. He did not receive any response to that letter. These matters form the basis of a complaint by the defendant of delay on the part of the plaintiff.

Mr Carty goes on to refer to the disclaimer of liability by the defendant on the 8th August, 2001 and states that any claim in relation thereto is now barred by the provisions of the Statute of Limitations, 1957. He submits in his affidavit that it would not be appropriate to add plaintiffs whose claims are statute-barred, as it could operate to defeat a plea under the statute. In that regard, however, I note that there is no plea contained in the Defence, as currently filed, under the Statute of Limitations. But of course, Mr Carty draws attention to the arbitration clause also, and that has been pleaded and I have already referred to that.

In response to that affidavit the plaintiff’s solicitor, Peter Duffy has sworn an affidavit on the 19th November 2008. He takes issue with what Mr Carty stated as to when time began to run in relation to these claims. But he goes on to say that in any event, and as a protective measure, he in fact had issued proceedings on behalf of Genport, Calla, and Christopher O’Reilly on the 1st November, 2006, but did not serve same. That summons cannot now be served without an application to renew same. He states that rather than bring such an application on an ex parte basis, he instead brought the present application. He asserts that there can be no prejudice to the defendant in these circumstances in having these parties joined as plaintiffs in the present proceedings.

In his affidavit, Mr Duffy accepts that there was some delay in the delivery of the Statement of Claim, as stated by Mr Carty, but that this was for reasons related to some dispute between the plaintiff and his former solicitor, and that this was explained to the Master of the High Court on the occasion of the defendant’s motions to compel delivery of the Statement of Claim. He submits that in so far as the defendant is resisting the present application on grounds of delay, this is unsustainable and should rather be the subject of an application to dismiss the plaintiff’s claim for want of prosecution.

Counsel for the plaintiff on this motion, Barbara McGrath BL has referred to the provisions of Order 15, rule 13 RSC and also to Order 15, rule 1 RSC.

Order 15, rule 13 RSC gives the Court a general power to, inter alia, add, whether as plaintiff or defendant, with or without an application being made in that regard by either party, “any parties … who ought to have been joined, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter …” (my emphasis)

Order 15, rule 1 provides:

(1) All persons may be joined in one action as plaintiffs in whom any right to relief in respect of or arising out of the same transactions or series of transactions is alleged to exist, whether jointly, severally or in the alternative, where, if such persons brought separate actions, any common question of law or fact would arise ……”

Counsel submits that as the amounts for which indemnity are sought from the defendant under the insurance policy taken out by the plaintiff are sums in respect of which judgment has been given against Genport and Calla and Christopher O’Reilly, wholly-owned subsidiaries and employee respectively, and whose interests are noted on the policy, it is clear that they are each persons “whose presence before the Court may be necessary to enable the Court to effectively and completely to adjudicate upon and settle all the questions involved in the cause or matter”.
Matthew Jolley BL for the defendant submits that the plaintiff, and/or the proposed added parties cannot succeed in this action because first of all the arbitration clause has not been invoked within the twelve month period referred to therein and that the claims are therefore deemed to have been abandoned. He also submits that the claims are in any event statute-barred. In these circumstances, where the claims cannot succeed, the Court should not make an order adding the proposed plaintiffs. He relies also to some extent at least on the delay on the part of the plaintiff to date in the delivery of a Statement of Claim and Replies to Notice for Particulars, and that even on this ground the plaintiff should be found not to be entitled to the order sought.

In my view, the parties which the plaintiff seeks to add as plaintiffs are parties who come within Order 15, rule 13 RSC, given that they are the persons whose liability for the judgment sums and costs are payable. They are wholly-owned subsidiaries and an employee of one or both subsidiaries respectively, and it is certainly arguable that the present plaintiff is not the appropriate party to sue under the policy for the indemnity in respect of these sums.

As far as the failure to invoke the arbitration clause is concerned, that is a matter which will have to be the subject of evidence and legal submissions at the hearing. Similarly, whether or not the claims of any of the plaintiffs are statute-barred is a matter to be raised by way of defence to the claim, and will require evidence and legal submissions before the matter can be finally determined. This is not a case where it is already beyond any possible doubt that the claims are statute-barred. The defendant can plead these matters so that they can be determined.

It is hard to see that the defendant is prejudiced by the addition of the proposed added plaintiffs. If the defendant succeeds in defending the claims successfully, it will be entitled to an order for costs against all the plaintiffs. It cannot be said that the costs of the proceedings will be increased significantly by the addition of the proposed plaintiffs, nor will it add to delay in having the case determined, given the Court’s powers to make directions in relation to any amended pleadings necessitated by the addition of these additional plaintiffs.

In all these circumstances, it is appropriate to make the order sought adding Calla Associates Limited, Genport Limited and Christopher O’Reilly as plaintiffs to these proceedings, and I will so order.

 

Brandley v Deane

[2016] IECA 54

JUDGMENT of the Court delivered by the President on 2nd March 2016
1. This is an appeal by the plaintiffs from the decision of the High Court (Kearns P.) dismissing their claim on the ground that it was statute-barred. The issue is when the cause of action accrued and the 6-year time period began to run.

2. The plaintiffs issued their plenary summons on 30th November 2014, claiming damages in breach of contract and negligence against the defendants in respect of the construction of two houses at Williamstown, County Galway. Mr. Liam Brandley, the first plaintiff, was the developer of the houses, operating through his company, WJB Developments Ltd. The first defendant, Mr. Deane, was the supervising consulting engineer who certified compliance with planning permission and building standards. The second defendant, Mr. Lohan, was the ground works contractor whose work included the foundations of the houses.

3. Each of the defendants pleaded the Statute of Limitations. The first defendant, Mr. Deane, brought an interlocutory motion to have the action against him dismissed on the ground of the Statute of Limitations. In a judgment of 28th November 2014, Barr J. refused the application because the matter could not be determined on the basis of the affidavits before the court. He permitted the plea to remain as a live issue in the defence, but held that there was such a factual dispute between the parties that it prevented the matter being dealt with on affidavit. Thereafter, the two defendants brought motions on notice for the dismissal of the plaintiffs’ claim and those matters came for hearing and were determined by Kearns P. on 16th April 2015 on oral evidence. The President acceded to the defendants’ applications and dismissed the action. From that order, the plaintiffs appeal.

4. Before furnishing the relevant dates by way of preface to the discussion of the issue, it is relevant to note that each of the defendants acknowledged that he was negligent in the manner alleged by the plaintiffs. Mr. Deane accepted that he should have inspected the work at the time when the foundations were installed and that he was also negligent in certifying compliance with planning permission and building regulations in respect of the houses as a whole which he did on 4th September 2004. As for Mr. Lohan, he acknowledged that the foundations that he installed were defective and that he was negligent in that respect.

5. The relevant dates are as follows.

• The foundations were completed in March 2004.
• On 4th September 2004, Mr. Hubert Deane issued his Certificate of Compliance with planning permission and with the building regulations.

• The evidence before the President was that the houses in question, namely, the second and third houses of the scheme of three were completed in January/February 2005.

• In December 2005, Mr. Brandley observed that cracks had appeared in each of the houses.

• The plenary summons was issued on 30th November 2010.

6. The question, accordingly, to be decided on this appeal is when the plaintiff’s cause of action accrued: was it in 2004, in March or in September, as to which it does not matter because each is more than six years before the proceedings were instituted, or is it, as the plaintiffs contend, in December 2005 when the cracks appeared?
7. The parties are not in dispute about some fundamental points. It is agreed that the test is not based on discoverability; that is appropriate to personal injury actions by reason of the amendment of the Statute of Limitations, but it does not arise in regard to property damage of this kind. The question is when did the plaintiffs suffer damage by reason of the negligence of the defendants? When was the tort of negligence complete?

8. The first defendant, Mr. Deane, is represented by Mr. Fogarty S.C. who submits that the foundations of the premises were laid in March 2004 and that is the date from which the Statute of Limitations began to run. The foundations were defective from the outset and those defects were obvious and discernible and that condition would have been discovered by Mr. Deane had he inspected at that time. Mr. Deane agreed with that point in cross-examination by Mr. Fox S.C. for the second defendant, Mr. Lohan. Mr. Fogarty’s case is that the plaintiffs could have commenced proceedings at the point where the foundations had been laid in March 2004. Mr. Fogarty is keen to make the distinction between the discovery of the defect and the existence of the defect and the damage which he places at the time when the foundations were installed in March 2004.

9. Mr. Fox S.C. for the second defendant, Mr. Lohan, makes the same submission. He says that the cause of action against his client was complete at the time when the defective foundation was installed in March 2004. The plaintiffs could have sued at that point. If Mr. Deane had complied with is obligation and had not been negligent, then he would have inspected, in or about March 2004, and would have discovered the defective foundations which represented the negligent performance by Mr. Lohan of his particular duties. The case is that the foundations were defective since March 2004 and loss and damage were thereby caused to the plaintiffs. He emphasises that the test is not one of discoverability of the damage, but of the occurrence of damage.

10. The plaintiffs’ case is that the tort of negligence is not complete until damage has been caused. Mr. Lyons S.C. for the plaintiffs agrees that the test is not discoverability, but he does emphasise that neither is it the simple fact that one can point at a particular moment to conduct that is characterised as negligent. That is not sufficient; there must be loss or damage as a result of the negligence in question. He cites Hegarty v. O’Loughran [1990] 1 IR 148 at 153 per Finlay C.J. as follows:

“A tort is not completed until such time as damage has been caused by a wrong, a wrong which does not cause damage not being actionable in the context with which we are dealing. It must necessarily follow that a cause of action in tort has not accrued until at least such time as the two necessary component parts of the tort have occurred, namely, the wrong and the damage.”
11. The plaintiffs’ essential point is that although the negligent installation of the foundations and the negligent certification are outside the 6-year period, the damage that happened as a result came about within the period.
12. The plaintiffs, in written submissions, make further citations from the same authority to the effect that the cause of action does not accrue until some damage actually occurs.

13. Fennelly J. in Gallagher v. ACC Bank [2012] 2 I.R. 620 at 656, said:

“I do not think the cause of action accrues when there is a mere possibility of loss. To hold otherwise would be doubly unfair to the plaintiff. If he sues early, he may be unable to quantify his loss. The defendant may be able to point to imponderables and uncertainties and argue reasonably that the plaintiff is unable to prove on the balance of probabilities that he has suffered any actual damage. If, on the other hand, the plaintiff waits until his loss materialises, his claim will be held to be statute-barred, if mere possibility of loss is the test.”
14. Mr. Lyons points out that the onus of proof is on the defendants to establish the factual basis for their applications.
Decision
15. It seems to me that the learned President was in error in this case. It is clear that negligence by itself without the accompaniment of damage or loss is not actionable. The plaintiffs did not suffer damage at the time when the defective foundations were installed. When the defective foundation was put in, the only complaint that the plaintiffs could have had was that the foundation was defective. They had not suffered any damage at that point – there was merely a defective foundation – but that is not damage of a kind that is actionable in tort. Indeed, it seems to me to be very questionable whether there was an action in breach of contract at that time, but I do not have to consider that on this appeal.

16. Recent jurisprudence in the neighbouring jurisdiction makes clear that financial loss in respect of specific defects does not give rise to a cause of action in negligence unless the defects result in damage to other property, see Robinson v. P.E. Jones (Contractors) Ltd. [2011] 3 WLR 815.

17. The evidence here is that the foundation of these houses was defective, but it did not cause damage at that time. It caused damage in December 2005. The evidence is not that there was hidden damage which became discoverable at a later point; it is that the damage resulting from the defective foundations happened in December 2005.

18. It seems to me to be clear that no damage resulted to the plaintiffs in March 2004 when the foundations were installed. I do not agree that the plaintiffs had any right of action at that point. They could not prove any loss. Moreover, it seems to me that it would have been quite open to the second defendant, Mr. Lohan, or the first defendant, as the consulting engineer, to have subsequently discovered or decided to investigate the condition of the foundations. They would have been entitled to put right any defects that they identified and the plaintiffs would have had no right of action as a result. There could have been some delay in the completion of the project, but that would have given rise to entirely different considerations. In respect of the specific acts of negligence, the fact that the defendants might have identified the defects and remedied them is an illustration of the absence of loss at that point and the unavailability to the plaintiffs of any right of action there and then.

19. It is true that a plaintiff might consider, in appropriate circumstances, an action for anticipatory breach of contract or might consider repudiating the agreement, but we are not concerned with that question here, but merely with the right of action in negligence. In that respect, these various observations that I have made are no more than an expatiation upon the proposition outlined in Hegarty v. O’Loughlan, namely, that the cause of action does not arise until loss or damage have been sustained by the plaintiff.

20. In the circumstances, it seems to me that the situation here is clear and that the defendants have pitched the beginning of the period of limitation at too early a point that does not take account of the requirement that damage be actually suffered by the plaintiff in order to complete the cause of action.

21. I would, accordingly, allow the appeal and remit the matter to the High Court. In view of the express admissions made by the defendants as to the negligence on their parts, it would seem to me to be that the case should proceed as an assessment of damages, but that issue is not before this Court and so I would leave it as a question to be decided if it arises appropriately because of the positions adopted by the defendants in the High Court.

Bus Éireann v Insurance Corporation of Ireland plc

[1994] 2 ILRM 44
Morris J

This matter comes before the court pursuant to an order of 6 April 1992, which directs that primary issues should be tried prior to the hearing of the action and the issues are as follows:

1. Whether the action herein is statute-barred pursuant to the provisions of s. 9 of the Civil Liability Act 1961.

2. If, which is denied, the defendant is liable to the plaintiff, whether or not pursuant to the provisions of s. 76(3) of the Road Traffic Act 1961 or s. 56(2)(a) thereof of the said Act, the plaintiff is entitled to seek recovery of any damages in excess of a total sum of £1,000 before any apportionment thereof.

The circumstances in which this issue arises can be summarised as follows. On 19 December 1987 a road accident occurred involving a vehicle driven by the late Mr Harry Lawless and a bus owned by Bus Éireann. In this accident the late Mr Lawless received fatal injuries. In the proceedings which followed, arising from that accident, it was determined by the High Court, on appeal from the Circuit Court, that the entire responsibility for the accident rested on the late Mr Lawless and that Bus Éireann was free of blame.

It is common case that the insurance cover which the late Mr Lawless had, covering his use of his vehicle, did not indemnify him or his representatives in respect of the driving on this occasion and, accordingly, by notice of motion dated 13 July 1989, Bus Éireann sought and was granted an order pursuant to s. 76(1)(d) of the Road Traffic Act 1961 as amended, granting it liberty to issue and serve proceedings on the Insurance Corporation of Ireland in lieu of the late Mr Lawless and on foot of that order a plenary summons was issued on 31 May 1990, seeking to recover from the Insurance Corporation of Ireland the loss and damage suffered by Bus Éireann in the accident which comprised £17,000 vehicle damage. In the defence delivered, the Insurance Corporation of Ireland plc raises the two issues which now fall to be determined.

Dealing with the first of these issues
This issue relates to the limitation period to be applied where a claim is made against an insurance company pursuant to s. 76 of the Road Traffic Act 1961.

It is common case that the relevant limitation period for proceedings which might have been instituted against the late Mr Lawless’s estate is that provided by s. 9 of the Civil Liability Act 1961 and this provides that the ‘relevant period’ is ‘within two years from the date of his death’ and it is also common case that the present action, having been commenced on 31 May 1990, is outside of that period and that if the proceedings were instituted against the late Mr Lawless’s estate they would be statute-barred. However, it is submitted that this is not a claim against the estate of a deceased person but that it is a claim based upon a cause of action expressly provided for in the Road Traffic Act 1961 at s. 76 and that the limitation period contained in the Civil Liability Act 1961 at s. 9 has no application.

S. 76 of the Road Traffic Act 1961 provides, in summary, and insofar as is relevant to the present case, that where a person claims to be entitled to recover from the owner of a mechanically propelled vehicle damages and where there was in place a policy of insurance covering the use of the vehicle at the relevant time, he may, by adopting the procedures provided for in the section get leave of the court to institute proceedings against the insurer ‘in lieu of the owner or user’ of the vehicle and to recover in this action from the insurer any sum he would have been entitled to recover from the owner or user.

I do not accept counsel’s submission that s. 76 creates a new cause of action in respect of which a separate limitation period would be applicable. To my mind, it is clear that all that the section does is to enable an injured party to substitute for a deceased defendant the insurance company holding cover at the relevant time. In reaching this conclusion, I consider it relevant that the entire structure and wording of the section seems to me to do no more than attach to the insurance company whatever responsibility the deceased owner had. Insofar as this case is concerned, the relevant part of s. 76 is 76(1)(d) which provides ‘where the claimant has not so recovered judgment for the sum, the claimant may apply to any court of competent jurisdiction in which he might institute proceedings for the recovery of the sum from the owner or user for leave to institute and prosecute those proceedings against the insurer or guarantor (as the case may be) in lieu of the owner or user….’ It is in my view clear that it is the same action but that there is an entitlement conferred upon the plaintiff to pursue the claim against the insurance company. I consider that all that is given to the plaintiff is the right to institute and prosecute the proceedings against the insurer or guarantor ‘in lieu’ of the owner.

Accordingly, I am of the view that the limitation period provided by s. 9 of the Civil Liability Act 1961 is the relevant limitation period, and there being no issue on this aspect of the case, I answer the first preliminary issue that the plaintiff’s action herein is statute-barred pursuant to the provisions of s. 9 of the Civil Liability Act 1961.

As to the second issue
This issue arises in the following circumstances. The Bus Éireann bus was damaged to the extent of approximately £17,000. It is the submission of the Insurance Corporation of Ireland plc that since Part IV of the Road Traffic Act 1961, and in particular s. 56 thereof, provides that insurance cover is compulsory for a mechanically propelled vehicle to the extent only of £1,000 in respect of injury to property, that the provisions of s. 76(3) limit any claim for damage to property to that amount.

From time to time the figure of £1,000 has been increased and now stands at £40,000. However, it is common case that at the relevant time the £1,000 figure applied.

On behalf of Bus Éireann it is submitted that s. 56(1) of the Road Traffic Act 1961 limits the obligation of a user of a mechanically propelled vehicle to the requirement of having insurance cover to the extent of £1,000. However, it is submitted, if a claimant suffers property damage in a sum in excess of £1,000 and if in fact the driver had cover in excess of that amount, then nothing in the Act prohibits the claimant from pursuing his claim against the insurance company in lieu of the driver to the full extent of his damage. It is common case that in the circumstances of this case the insurance cover which the late Mr Lawless had exceeded £1,000.

I do not accept this submission. S. 76 is made up of two enabling subsections which enable claimants to pursue an insurance company in respect of damages caused by a deceased owner or user of a mechanically propelled vehicle. S. 76(3) is in my view clear. It provides ‘subs. (1) and (2) of this section apply only to claims against the liability for which an approved policy of insurance or an approved guarantee is required by this Act to be effected’. In my view it is equally clear that s. 56 of the Road Traffic Act 1961 requires that an approved policy of insurance is required to be effected ‘against all sums without limit save as is hereinafter otherwise provided’ and subs. (2)(a) expressly provides that such insurance or guarantee ‘in so far as it relates to injury to property, be limited to the sum of £1,000 in respect of injury caused by any one act of negligence or any one series of acts of negligence collectively constituting one event’.

I am satisfied that the Act requires an approved policy of insurance or guarantee only to the extent of £1,000 and that the entitlement to recover under s. 76 of the Road Traffic Act 1961 is limited to that amount.

Accordingly, I answer the second issue that the plaintiff would not be entitled in this action (even if it were not statute-barred) to seek to recover any damages in excess of a total sum of £1,000 before any apportionment thereof.

McHugh v McHugh

[2015] IESC101

JUDGMENT of Mr. Justice William M. McKechnie delivered on the 17th day of December, 2015

Introduction:
1. The plaintiff is a security officer and part-time farmer and resides at 4 Palace Fields, Tuam, in the County of Galway. In addition he, the plaintiff:-

(a) is a brother of the first and second named defendants herein. They also had two sisters, one now deceased, making a total of five siblings;
(b) is a lawful son of the late Michael McHugh, who died on the 9th May, 1976, and the late Rita McHugh, who died on the 12th January, 1998; and

(i) on the death of his father, Gerard inherited the lands comprised in Folio 53169F of the Register of Freeholders of the County of Galway;
(ii) prior to her death, Mrs. McHugh was entitled to be registered as full owner of the property the subject matter of the within proceedings, namely the lands and hereditaments comprised in and described on Folio 43217F of the Register of Freeholders of the County of Galway (sometimes referred to as “the subject lands”), such entitlement arising from the provisions of a Marriage Settlement executed in 1943, evidently on the marriage of the parents to the parties herein;

(c) is a grandson of the late Mary Ellen Dunne, mother of Rita McHugh, who died on the 23rd June, 1985, and who prior to her death was registered as limited owner of the aforesaid lands on Folio 43217F of the Register of Freeholders of the County of Galway.
2. These proceedings, howsoever formulated and howsoever worded, essentially involve a dispute between the three brothers in relation to the subject lands. The plaintiff challenges the validity of a Deed of Transfer of such lands made by his late mother to the defendants in 1990. In the circumstances occurring, which are more fully described later in this judgment, he claims that for the several reasons as pleaded, he – and not his brothers – should be regarded as the rightful owner of these lands. The defendants issued a motion to have the proceedings dismissed on the basis that the same were not maintainable against them and were bound to fail; Murphy J. acceded to such application in a judgment delivered on the 10th February, 2012. Mr. Gerard McHugh (“the plaintiff” or “the appellant”) has appealed to this Court from the entirety of such judgment and the resulting order, dated the 28th February, 2012, and perfected on the 3rd May, 2012.

3. In addition to the headline details set out at para. 1 above, the following events which took place on the dates specified are important factors in an understanding of this case:-

• 9th July, 1987: Mrs Rita McHugh (“the deceased”) made her last Will and Testament in which, having nominated the plaintiff as her sole executor, she devised and bequeathed all of her property, both real and personal, of every kind and nature and wheresoever situate, to her son Gerard, absolutely.
• 5th February, 1990: the deceased executed a Deed of Transfer of the subject lands in favour of the defendants, who duly lodged the executed Transfer with the Land Registry for registration.

• 19th February, 1991: the defendants became registered as full owners in fee simple of the subject lands.

• 12th January, 1998: the deceased, as above stated, died.

• 26th October, 2011: Probate of the last Will and Testament of the deceased was granted to the plaintiff.

4. Whatever may be the legal outcome of this appeal, it can with both certainty and conviction be said that this is a most tragic case which has created deep and suffering divisions within the McHugh family. Not for the first time this Court has witnessed first-hand how families can be irreparably divided on issues such as due entitlements, property inheritance and the cruelty of real or perceived ingratitude. In fact, such disputes can be everlasting in memory and affect not simply the immediate members who are personally embattled in conflict, but also many members of their extended families. It is of enormous regret that some less confrontational forum could not have been settled upon which might have helped to resolve this conflict in a less attritional and harrying manner, and at least to have achieved some degree of acceptance for those involved, even if that should have fallen short of the harmonious relationship which we all strive for in a family context. Alas, even that bit of good fortune was beyond the McHughs.

5. The best which this Court can hope for now is that, irrespective of the decision which I am about to give, some measure of finality will be brought to these proceedings so that the parties involved can, at least in some respect, reposition this dispute and concentrate more fully on their lives and the lives of their loved ones, without the ever constant reminder of the underlying hurt which the further continuation of this case would inevitably perpetuate. Even though earnestly stated, I have no doubt but that the aggrieved party will still feel wronged and will find little comfort in what I have said. However, having accessed the legal process and having ended up before this particular Court, I hope that the expressed sentiments will not be entirely discarded. They apply with equal authority to the parties who will feel more satisfied with the outcome, but both Myles and Anthony McHugh should not forget that they too have played a significant role in this saga. There are, to use the awful phrase, no ultimate winners in this conflict.

A Bit More Detail:
6. In order to understand more fully the issues raised in this appeal, it is necessary to refer to the pleadings, and firstly to note that the date of the issue of the Plenary Summons was 4th March, 2004. For reasons not entirely clear, but fortunately not of real significance at this point in time, the exchange of documentation in this case certainly took a leisurely course, with the joint defence being delivered only on the 24th January, 2007. Ultimately, however, some movement of substance was achieved by the delivery of an amended defence and counterclaim on the 23rd March, 2011, which came about in circumstances which I will outline in a moment. First, however, reference must be made to the claim advanced on behalf of the plaintiff:

7. In the Statement of Claim the following reliefs were sought:-

(a) an Order directing that the purported Deed of Transfer by the said Rita McHugh, dated 5th February, 1990, of the lands in question to the first and second named defendants be set aside, revoked and cancelled;
(b) an Order providing that Probate in Solemn Form of the last Will and Testament of the said Rita McHugh, made on the 9th July, 1987, be granted to the plaintiff;

(c) a Declaration pursuant to the provisions of s. 117 of the Succession Act 1965 that the said Rita McHugh failed in her moral duty to make proper provision for the plaintiff in accordance with her means;

(d) a Declaration that the defendants are estopped from asserting title to the subject lands and a Declaration that they be regarded as holding such lands on trust for the plaintiff; in either event, a further Order was sought that such lands be conveyed to the plaintiff;

(e) an Order that the plaintiff is entitled to be registered as owner of the said lands “pursuant to the provisions of the Registration of Title Act 1964”.

Further consequential orders as would follow from the granting of any of these reliefs were also prayed for. Finally, damages were sought for the loss and damage, including special damages, allegedly suffered and sustained by the plaintiff, as well as interest thereon and the costs of these proceedings.

8. The Defence and Counterclaim in its original form was delivered on the 24th January, 2007. It did not contain any plea referable to statutory time bars, although it did raise as an issue the matter of delay based on common law/equitable principles. That was to change, however, which change had an important bearing on this case. Following the issue of a Notice of Motion to that effect, the High Court, by Order dated the 17th January, 2011, permitted the defendants to file an Amended Defence and Counterclaim. The significance of this was that for the first time the defendants decided to meet the claim by asserting statutory time barriers: they did so under the heading of “Preliminary Objections”. These were pleaded as follows:-

“Preliminary Objections:
(I) Save to the extent that these proceedings comprise a claim to prove the purported last will and testament of the late Margaret (otherwise Rita) McHugh (“the Deceased”), dated 9th July, 1987, they are not maintainable by the Plaintiff against the Defendants and ought to be struck out on the grounds that:-

(a) insofar as they comprise a claim made pursuant to sections 117 and/or 121 of the Succession Act, 1965, same are not maintainable as against the Defendants herein who are not the personal representatives of the Deceased;
(b) insofar as they comprise an application to set aside the transfer of 5th February, 1990, the Plaintiff is neither a party to the said transfer nor the personal representative of a party thereto and as such the plaintiff does not have locus standii (sic) to maintain such an application;

(c) insofar as they comprise a claim based on an alleged agreement made between the Deceased and the Plaintiff and/or representations or promises allegedly made by the Deceased to the Plaintiff and/or upon the alleged legitimate expectation on the part of the Plaintiff arising as a result of the Deceased’s conduct, same are not maintainable as against the Defendants, neither of whom are the personal representatives of the deceased; and

(d) insofar as they comprise a claim for damages, any claim for damages, even if valid (which is denied), is a claim against the estate of the deceased and is not maintainable against the Defendants herein.

(II)Insofar as the plaintiff seeks to set aside the aforesaid transfer of 5th February, 1990 pursuant to s. 121 of the Succession Act, 1965, such an application is not maintainable in respect of a disposition occurring in excess of three years prior to the death of the disponer and so is not maintainable in respect of the said transfer since the same was executed by the Deceased almost eight years prior to her death.”
9. Very shortly after filing this Amended Defence and Counterclaim, for which a further extension of time was required, the defendants, energised by the antecedent order of the 17th January, 2011, issued a motion dated the 9th June, 2011, in which they sought to have the plaintiff’s claim dismissed, save to the extent that Probate in Solemn Form of the last Will and Testament of the deceased was being claimed. They did so on the basis set out in that amending document. In addition, they sought, if appropriate, a Declaration that the purported will constitutes the only valid and duly executed will of their mother and they also looked for a default judgment in respect of the counterclaim. The application was moved on the grounding affidavit of their solicitor, Mr. John Murphy. With issue having being joined on the factual and evidential matters as averred to, the application came on for hearing before Murphy J. in November, 2011, who delivered his judgment in February, 2012. The resulting order, which was perfected on the 3rd May, 2012, dismissed the plaintiff’s claim, awarded full costs against him and granted judgment in default on the counterclaim (see para. 22 infra for full details). It was a complete victory, one might say, for the defendant brothers. It is against both the judgment and the Order that Gerard McHugh has appealed to this Court: he has done so on the several grounds set out in his Notice of Appeal dated the 18th May, 2012. This is my decision on such appeal.

Family Background: Assertion and Counter Assertion:
10. As pleaded, the plaintiff says that he was attending Athenry Agricultural College in or about 1974 when his father fell ill. He forwent his studies and at the time returned to work and live on the home farm in Tuam in order to support the family, as his father was no longer able to do so. As stated, he became owner or entitled to ownership of the lands contained in Folio 53169 of the Register of the Freeholders of the County of Galway on his father’s death. On many occasions throughout the years, the plaintiff’s mother represented to him that the lands in Folio 43217 F would fall to be his upon her death. He says that both parcels of land are contiguous and would obviously farm as a unit: the defendants deny this. In any event, the plaintiff claims that he relied on these statements of his mother and in so doing irretrievably altered his position and standing in life, all to his long term detriment.

11. By working as he did and where he did, the plaintiff was able to provide support for his mother, father and grandmother until each of their respective deaths. His mother became seriously incapacitated in and from 1988 onwards, with the plaintiff and his wife caring for her for the following two years. In September, 1990, Mrs. Rita McHugh was admitted to a nursing home and there she was to remain until her death on the 12th January, 1998. The plaintiff says that he discharged the entirety of the expenses associated with this care, whilst also considerably improving the lands the subject matter of this dispute.

12. Mrs. McHugh, as above noted, made a Will on the 9th July, 1987, devising all her property, including realty, to the plaintiff, who was also named as sole executor of her Estate. However, by Deed of Transfer dated the 5th February, 1990, the said testatrix purported to convey the said lands to the defendants, who were registered as owners in the Land Registry on 19th February, 1991. The plaintiff maintains that this Deed of Transfer was obtained by unlawful means, including the exercise of improper and undue influence and the application of inappropriate pressure on his mother by the defendants. He furthermore asserts that his mother was, at the date of the purported Deed, of unsound mind and was both physically and mentally incapable of resisting the pressure of which he speaks; in addition, she received no independent legal advice at the time, which, if she had, might well have seen a revocation clause being included, or at least might have ensured that adequate consideration was inserted at an appropriate value. Even more astonishing was the absence of any life interest or right of residence, despite her illness, or any right of maintenance and support. Whilst I do not have to explore these issues, given the view which I have taken of the case, it cannot but be acknowledged that in different circumstances these may well be worthy of serious and critical investigation.

13. Gerard McHugh goes on to say that the defendants did not make him aware of their purported ownership of the lands until after their mother’s death, sometime around May, 1998. From that time onwards, the defendants have wrongfully sought to exclude him from the use, enjoyment and ownership of the subject lands contained in Folio 43217 F of the relevant Register of the County of Galway. He has thus suffered serious loss and damage as a result.

14. The plaintiff also claims that in making the Deed of Transfer, his mother breached agreements, promises and representations made to him over the years, all to the effect that the lands would be his, thus acting in breach of trust and in breach of his legitimate expectation. A separate cause of action is also couched within the meaning of s. 117 of the Succession Act 1965, in which context he points out that each of the plaintiff’s two brothers were provided with a third level education by their parents, which enabled them to become established in substantive and remunerative occupations. Each of his two sisters was afforded the same support, even if for different reasons neither availed of it. In any event, this leads the plaintiff to say that, within the meaning of the said section, his mother therefore made proper, adequate and appropriate provision in accordance with her means for all of her other children, including in particular the defendants.

15. Finally, the plaintiff claims that it would be unjust, unconscionable and inequitable to allow the defendants to disregard the promises so made to him and to insist on their legal rights, if any, to the said lands. He states that the defendants hold the land in trust for him.

16. The defendants take issue with much of the detail as asserted by Mr. Gerard McHugh: they deny that he was ordered or requested to forgo his education in order to support the family on the farm; they in fact assert that he returned to the home place of his own volition. They also state that the plaintiff was adequately compensated for his work on the farm inter alia by obtaining ownership of the lands in Folio 53169 F, comprising 33.4 acres (para. 1 supra): this of itself constituted proper, adequate and appropriate provision for him under the Succession Act. They take issue with the alleged promises and representations and strongly claim that the plaintiff knew of their parents’ wishes, namely that the subject lands would pass to the defendants upon the survivor’s death.

17. The defendants continue their narrative by seriously disputing virtually all of the germane allegations made by their brother: it is unnecessary, however, to further impose on this judgment the manner in which this confrontation continues, as it does so in such a personal way as, for example, by questioning who, when and how often Mrs. McHugh was visited whilst in nursing home care. Only you, the family, know the full and true story. In any event, further elaboration of matters of similar disposition is legally unnecessary and, certainly from my point of view, ought to be strongly avoided.

The High Court Judgment:
18. The learned High Court judge took the view that, at the time of initiation of the action in 2004, the plaintiff, whilst nominated as the Estate’s executor in the Will of his mother, was not the legal personal representative of the deceased as no grant of probate had either been applied for or obtained at that time. This as a matter of law is unquestionably correct.

19. Insofar as he purported to make a claim against the Estate, the plaintiff was, according to Murphy J., precluded from doing so in his capacity as executor. Mr. McHugh could not suppose to prosecute, and in the same breath to defend a claim, both on behalf of and against the Estate. If he wished to pursue a cause of action, he should not have sought a grant, or if he had already obtained same he should renounce it, in which case an independent person would be required to extract a grant of representation with Will annexed so as to administer the Estate, and as part thereof to consider the merits of the claim made and if necessary to defend it. This applied to both applications made under ss. 117 and 121 of the Succession Act 1965, respectively.

20. The learned judge stated that it is clear from the provisions of s. 9(2)(b) of the Civil Liability Act 1961, as amended (“the 1961 Act”) that the relevant limitation period for maintaining a cause of action which has survived against the estate of a deceased person “is that which first expires, the period of two years after the date of death, or, at most, a twelve year period from the 5th February, 1990”, the transfer date. The court was satisfied that the plaintiff did not have standing to challenge the Deed of 5th February, 1990, and that the purported claims were not maintainable by reason of the efflux of time and in the face of the statutory period for the bringing of same. There had been undue and inordinate delay, and the reasons advanced to explain it could not excuse it.

21. The transfer was made in 1990 and registered in 1991. Rita McHugh died in January, 1998. Proceedings did not issue until more than six years later, on the 4th March, 2004. Furthermore, the plaintiff remained on the land for some time after his mother’s death. The Court was satisfied that such a delay was inexcusable in the circumstances. Even in light of the plaintiff’s submission that he was not aware of the defendants’ ownership of the lands until they sought possession shortly after his mother’s death, it was still a further six years before he took action. The Court was “satisfied that s. 9(2) of the Civil Liability Act 1961 precludes the plaintiff from making a claim after two years from the date of the death of the deceased.” Accordingly, the Court granted the defendants’ application and made the orders as next appearing.

High Court Order:
22. The High Court, in an Order dated the 28th February, 2012, and perfected on the 3rd May, 2012, ordered that the action be dismissed and that the plaintiff pay all costs, including reserved costs. The “lis pendens” registered on the lands in Folio 43217 F was vacated. The plaintiff was refused liberty to deliver a defence to the Counterclaim; judgment was entered against him in respect of that claim with damages to be assessed by a judge sitting alone. A stay on the High Court Order was refused. Further, although not so expressly stated, the learned judge in his judgment also effectively refused to allow the plaintiff to deliver an Amended Statement of Claim. In this regard, however, let it be immediately said that even if allowed the amendments would not, in the learned judge’s view, cure the inordinate and inexcusable delay point and, more specifically, could not overcome the statutory bar contained in s. 9(2) of the 1961 Act.

Notice of Appeal:
23. By Notice of Appeal dated the 18th May, 2012, the appellant indicated his intention of appealing to this Court against the judgment and Order of the High Court. The grounds relied upon are numerous, involving much repetition and duplication: rather than setting these out or even attempting to paraphrase them, I think that I do no injustice whatsoever to Gerard McHugh if I quote para. 8 of his affidavit sworn on 20th February, 2015; it reads:-

“The plaintiff contends and will contend at the hearing of the plaintiff’s motion and the hearing of the plaintiff’s appeal and any subsequent hearing in relation to this case, the following:-
(A) That the plaintiff is entitled to be considered the legal personal representative of his mother, the late Rita McHugh, and in March, 2004 to bring proceedings in this case.
(B) That the said “Deed of Transfer” dated 5th February, 1990, was a wholly improvident Deed and would likely be declared null and void and struck out by a court on a number of grounds, said grounds have been set out in the plaintiff’s submissions elsewhere.

(C) That the plaintiff’s case should not have been dismissed by Justice Murphy on the grounds that it is barred under the Statute of Limitations.

(D) That the plaintiff is not guilty of causing inordinate delay either in bringing his case against the defendants, Myles and Anthony McHugh, or in bringing said case to trial and that any such delay should not be deemed to be inexcusable, and

(E) That the Supreme Court is empowered under O. 58(8) of the Rules of the Superior Courts 1986, to allow the plaintiff adduce evidence as contained in the plaintiff’s documents index and not least in circumstances where there is such a clear dispute on facts.”

Notice of Motion:
24. On the 12th December, 2013, the appellant issued a motion, returnable before this Court, seeking permission to include in the Books of Appeal a collection of documents described as an “Exhibit Index”, so that the same might be referred to and used by him as part of his appeal. This application was grounded upon a supplemental affidavit in which, over almost 100 paragraphs (in fairness all very brief), he identifies each document, what in broad terms it covers and how, in his view, it is relevant to the appeal. As the respondents objected to the admission of virtually every such document, the court decided to adjourn further consideration of the application, to the appeal proper. Hence, that issue is also before this Court.

Submissions of the Appellant:
25. In his “Written Submissions for Permission to Appeal”, Gerard McHugh described the judgment of Murphy J. as being based on two grounds: a) that he was not the legal representative of the deceased at the time of bringing the proceedings in 2004; and b) that his case was outside the time allowed for bringing such action under the Statute of Limitations and further, that there was inordinate and inexcusable delay. He strongly challenged both of these conclusions.

26. The plaintiff in person presented his address on these issues and responded in a succinct and admirable manner to any engagement instigated by the court. He referred to s. 10(1) of the Succession Act 1965 (“the 1965 Act”), which provides that both the real and personal estate of a deceased person shall on his/her death, notwithstanding any testamentary disposition, devolve on and become vested in his/her personal representative(s). He said that an executor who carried out certain acts or functions in relation to an estate might be deemed to have accepted the office. His intention from the outset, he submitted, was to prove the Will and as the sole beneficiary he also had a particular interest in the prosecution of these proceedings.

27. Mr. McHugh also referred to McGlynn v. Gallagher [2007] IEHC 329, a case which he said touched upon the locus standi of a beneficiary to bring an administration suit. In that case the plaintiffs had extracted a grant of probate 18 months after the death of the deceased, having been nominated as executors in her last Will and Testament. Edwards J. dismissed the first named defendant’s appeal from a comprehensive order of the Circuit Court, which endeavoured to cover every aspect of that long running litigation. The plaintiffs had a grant of probate and the court was not entitled to look behind it. While the defendants were beneficiaries and the plaintiffs were not, the issue of the locus standi of such beneficiaries to seek a Grant simply did not arise in these circumstances.

28. The appellant submitted that the jurisdiction of the court to strike out or stay proceedings exists so as to ensure that an abuse of process does not take place. Barry v. Buckley [1981] I.R. 306, per Costello J. Thus proceedings will be stayed if they are frivolous or vexatious or if it is clear that the claim as advanced must fail. The other purpose of the jurisdiction is to ensure that litigants are not subjected to the time consuming, expensive and worrying process of being asked to defend a claim which is unstateable and which therefore cannot succeed. His claim, he submitted, did not fall into either of these categories.

29. Mr. McHugh conceded that his claim under s. 117 of the 1965 Act and his reliance on estoppel principles could not be asserted against the defendants/respondents. Nevertheless, the remainder of the cause of action was a serious and significant claim concerning the validity of the deed of transfer. Where a relationship giving rise to a presumption of undue influence is established, and where it is shown that a “substantial benefit” has been obtained, the onus lies on the donee(s) to prove that the gift or transaction in question resulted from the “free exercise of the donor’s will”. Carroll v. Carroll [1999] 4 I.R. 241 was cited as an authority for this proposition.

30. On the issue of delay it was also submitted that there could be no possible prejudice in allowing the case to proceed, as all of the key witnesses were available to give evidence.

Respondents’ Submissions:
31. The respondents identify the issues arising on this appeal as being “(a) whether the plaintiff should be permitted to maintain a claim to set aside the Transfer; (b) whether the plaintiff should be entitled to amend his Statement of Claim to include a plea of estoppel against the Defendants; and (c) whether the default judgment in respect of the Defendants’ counterclaim ought to be set aside.”

32. The respondents submit that the High Court Order as made by the learned trial judge constitutes a “final order” for the purposes of the Rules of the Superior Courts 1986. The Minister for Agriculture v. Alte Leipziger AG [2000] 4 IR 32 at pp. 44 and 50; Woods v. Woods (unrep.) 3rd April, 2003. Accordingly, leave to adduce any new evidence is required. They say that the appellant cannot satisfy two of the requirements for the admission of such evidence, being those identified in Lynagh v. Macken [1970] I.R. 180. Firstly, he has not explained why the evidence which he now seeks to adduce was not used in the High Court. Secondly, he has not sought to explain the influence which such documents might have on the result of case. It is not appropriate, they say, for the court to form its own view as to either of these matters: there must be evidence to meet the criteria which, in the respondents’ view, simply does not exist in this case.

33. In Keating on Probate (4th ed.), the author, having referred to Ingall v. Moran [1944] 1 K.B. 160 at para. 21-28, says:-

“It is well established that an executor can institute proceedings and maintain an action before probate of the testator’s will is obtained, but a grant will be necessary before the hearing of the action.”
34. In the present case, on no occasion from the time of death in 1998, through the issue of the Statement of Claim in 2004 and right up to 2011, did the appellant seek to sue or maintain a cause of action in his capacity as executor of the deceased: his only claim in this regard being limited to obtaining a Grant of Probate to the Estate of the deceased person. Mr. McHugh did not extract a Grant until 2011, some 13 years after the date of death and over 20 years subsequent to the Deed of Transfer. In the interim he had put forward claims under ss. 117 and 121 of the Succession Act 1965, as well as claiming promissory estoppel against the deceased; these claims were entirely inconsistent with the position of a legal personal representative.

35. The respondents submit that allegations based on the alleged breach of legitimate expectation and promissory estoppel were barred in law by the time of the institution of the within proceedings. Any claim which the plaintiff could now bring as executor would appear to be in equity, in which case the principle of laches, as well as those involving inordinate and inexcusable delay, would apply.

36. The respondents say that the appellant, in the institution and in the prosecution of these proceedings, has been guilty of inordinate and inexcusable delay and that his claim, on this ground alone, should be dismissed. It is said that the principles underlying such a rule are well established. Firstly, the court must determine that the delay has been both inordinate and inexcusable; the onus of establishing the same is on the party so alleging. Secondly, even where an inordinate and inexcusable delay is found to exist, the court must exercise a judgment on whether in its discretion the balance of justice is in favour of or against the continuation of the case. Rainsford v. Limerick Corporation [1995] 2 I.L.R.M. 561 at p. 567 (“Rainsford”); Primor Plc v. Stokes Kennedy Crowley [1996] 2 I.R. 459.

37. The respondents address two specific issues in this context, both of which have been the subject of judicial discussion in recent years: firstly, the impact of the European Convention on Human Rights (ECHR) on applications to dismiss and, secondly, the extent to which a defendant’s inactivity is taken into account when addressing the balance of justice point. The former, i.e. the Convention, was looked at in cases such as Gilroy v. Flynn [2005] 1 ILRM 290, Stephens v. Paul Flynn Ltd [2008] 4 IR 31, Desmond v. M.G.N Ltd [2009] 1 IR 737, Rodenhuis and Verloop BV v. HDS Energy Ltd [2011] 1 IR 611 and Comcast International Holdings Inc v. Minister for Public Enterprise [2012] IESC 50 (“Comcast”). The respondents submit that despite a difference in judicial views as to whether the ECHR requires a “tightening up” of the test applicable to cases of delay, such that the courts should be less indulgent than previously, in practice the relevant principles remain unchanged.

38. As regards the role of alleged inactivity on behalf of a defendant as an ingredient to be considered when determining where the balance of justice lies (Rainsford), the respondents state that later decisions suggest that little weight should be given to this consideration. Anglo Irish Beef Processors v. Montgomery [2003] I.R. 510; De Braam Mineral Water Company Ltd v. BHP Exploration Inc [2011] IEHC 46. The respondents acknowledge the judgment of McKechnie J. in Comcast, where certain circumstances were identified which might result in a defendant’s inactivity being treated as a significant factor militating against granting an application to dismiss: however, it was forcibly argued that no such factors are present in the instant case.

39. The respondents say that, in light of facts of this case, the trial judge could not have come to any conclusion other than that there had been inordinate and inexcusable delay in the commencement of these proceedings given that they had issued in March 2004, almost six years after the plaintiff had become aware of the Transfer and had been evicted from the lands. Furthermore, they state that Mr. McHugh then failed to progress the proceedings to the point where the pleadings were closed and the issues were properly defined for a further period of seven years. Thus, the High Court was justified in concluding that there had been inordinate and inexcusable delay in prosecuting the claim. The respondents further assert that a trial which was concerned with factual issues which occurred over twenty years ago could not be fair. They submit that the Court should also have due regard for the value of the subject land and that the continuation of the present litigation would be disproportionate to that value.

40. The respondents further submit that the High Court was correct in dismissing all other aspects of the appellant’s claim, a situation which in effect he himself has acknowledged by indicating that the only cause of action with which he now wishes to proceed is the challenge to the Deed of Transfer.

41. As regards the Counterclaim, they say that in the absence of a reply and defence thereto, the High Court was entitled to grant judgment in such circumstances and that the order so declaring should stand. Any issues in relation to quantum can be addressed in the context of the hearing to assess damages.

42. The respondents’ answer to the motion which had been issued (para. 24 supra) is to say that the proposed amendments to the Statement of Claim, even if allowed, could not have saved the claim from being dismissed by the court in the exercise of its inherent jurisdiction and as such the court was correct to refuse the relief prayed for in that motion.

43. By a supplemental legal submission, the respondents addressed the level of review that this Court should engage in when considering an appeal against a discretionary Order of a High Court Judge. They say that the Court should not interfere with such an Order provided that, as in this case, it is within the limits of the trial judge’s reasonable discretion.

Decision:
44. The jurisdiction to terminate an action without a due merits consideration of the issues involved is one which produces a truncated form of justice and is one, even if very well established, which is inherently capable of creating an unforeseen injustice, unless the many safeguards which a series of cases have established are clearly understood and correctly applied, with a generous measure of scepticism to the fore. However, where the required searching type analysis is properly carried out, there is no doubt but that both under the Rules of the Superior Courts and by its inherent jurisdiction, a court not only has the competence but also is duty bound to strike out a case at that point in the proceedings, if justified in so doing. An unsuccessful claimant can have no justifiable grievance at such a course, as a respondent also has an equal right to justice and should not be forced to continue meeting a claim which, within established parameters, is, for example, bound to fail. Classically, this doctrine most appropriately fits situations where the facts (both primary and secondary), their meaning, and any inference(s) that may be relied upon are not disputed and are positioned in the context of particular statutory provisions, such as, for example, limitation periods. This is one such type case. Accordingly, if the learned trial judge on the limitation issue correctly applied the relevant provisions of either the Civil Liability Act 1961 and/or the Statute of Limitations 1957 to the undisputed facts, taking the appellant’s version at its highest, then he would have been justified in law in dismissing the action.

45. At the outset, it is important to note that on an application such as this the Court does not involve itself in an exercise of adjudicating on disputed issues of fact, or of resolving rival contentions made by or on behalf of the respective parties. It proceeds on the basis of taking the claim as made “at its high watermark”, and as assuming that the factual context pleaded, unless demonstrably wrong or self-evidently incredulous, is correct. This particular approach is required by law and should not be taken as being in any way equivalent to a judgment following a full trial, wherein the judge sets out his findings and prefers or accepts one version of the story as against and above another version. Therefore, in the context of this case the conflicting accounts, whilst noted, are not to be regarded as having been resolved. In fact, they are not, as it is not necessary to do so in order to apply the principles of law above set out. It is on such basis that this appeal is being determined.

46. Given this approach it is not necessary to deal with the Notice of Motion issued by the appellant in which he seeks to have admitted, for the purposes of this application, the “Exhibit Index” so referred to. Whilst I note that he has assembled what appears to be an impressive array of affidavits from different individuals, which to some greater or lesser degree support his case, nonetheless their consideration is not necessary for the reasons given. This equally applies to the medico-legal report of Dr. John A. Waldron, dated 9th July, 2003, to the admission and discharge records from Merlin Park Hospital for the period October 1978 to March 1991, and to a report dated 5th September, 1990, signed by the Registrar to Dr. O’Loughlin from the Mater Hospital, all of which relate to the medical condition and prognosis of his mother. In other circumstances and in a different context, the same could be highly material, but for present purposes cannot be so regarded.

47. Many issues have been canvassed on the documentation, a number of which have been referred to in the High Court judgment. The submissions, in as helpful a way as possible, have addressed these points. However, having given careful consideration to this matter, both in a narrow but also in a wider sense, I have come to the conclusion that the application can and, given the context of the dispute, as a matter of the utmost prudence and necessity, must be resolved by way of a simple issue. That relates to the asserted time bar contained in the Civil Liability Act 1961 (“the 1961 Act”) and perhaps far more pertinently in the Statute of Limitations 1957 (“the 1957 Act”).

48. This means that in addition to the “Exhibit Index” not being essential, the merits of the underlying case, as such, are not highly material. The only factors of real note are the events referred to in the earlier part of this judgment, coupled with an acknowledgement by Mr. Gerard McHugh that he/his solicitors obtained a copy of the relevant Folio No. 43217 F, in February, 1998. That folio, without doubt, showed both respondents as being full owners of one undivided half share each of the subject lands, having been registered as such on the 19th February, 1991. The referenced delay or the reasons therefor in the appellant obtaining a copy of the Deed of Transfer are not material to the question of knowledge regarding the ownership of these lands, if that issue had still been relevant. Since 1991, the respondents have been named on the relevant folio. The fact that their mother was never registered as such, and that the registered owner immediately preceding the entry of Myles and Anthony McHugh was their grandmother, is perfectly explainable as a matter of routine conveyancing practice. Once the folio was obtainable – and certainly once obtained – it was clear ex facie who the registered owners were.

49. It seems rather obvious, given the absence of any caveat being lodged, that there may have been no justification for the appellant in his Statement of Claim seeking an order granting him liberty to apply for a Grant of Probate: the continuation of that plea, however, was entirely justified in light of the allegation pleaded in the defence, namely that the said Will of the deceased had been procured by undue influence and by the improper exercise of pressure by the appellant on his mother. Whilst that plea was formally withdrawn in 2011, I am entirely satisfied that there was never any factual or sustainable basis for its making in the first instance, and that it was a highly inappropriate plea to have ever been included in the defence.

50. In this context, I accept that the Mr. McHugh at all times intended to obtain a Grant of Probate but that he was not advised at the earliest possible time that he should have taken steps to apply for such a grant. Therefore, his delay in so doing cannot be attributed to any inconsistent stance being adopted or ulterior motive being pursued by him: the simple explanation being that as given.

51. Lest by the approach which I have adopted I should be taken as in any way agreeing that the judge’s findings on the issue of non-statutory delay were correct, I should say this on the point. Whilst I agree that the delay was inordinate, I would if anything be of the view that it may in fact be capable of being excused: even if not, I would be inclined to think that on the balance of justice the case should not have been terminated on such basis. An important consideration in this regard was the fact that the respondents did not move to amend their defence, in such a crucial manner, until early 2011, almost four years after filing that document in its original form. There are other factors which in my view would also tend against granting the application on such basis. However, as I have said, a conclusive view on this issue is not necessary.

52. There is a further matter that ought to be addressed. It was entirely surprising to find on a motion, the essence of which was to have the plaintiff’s claim dismissed on the basis of being bound to fail, that the learned trial judge also gave judgment on the Counterclaim. This was remarkable for many reasons, including the correspondence which had passed between the plaintiff’s then solicitors, Scarry O’Connor, and the solicitors representing the defendants, Murphy Ballantyne. On the 21st April, 2011, the latter issued a twenty one day warning letter seeking a reply to the Counterclaim. On the 3rd May, 2011, Messrs. Scarry O’Connor indicated their intention to come on record and sought a letter of consent to the late filing of a reply to the amended defence and counterclaim. Without apparently any further correspondence the motion issued and, even more surprisingly, the Counterclaim was dealt with by the trial judge in the manner indicated. Irrespective of whatever outcome this appeal should otherwise have, I would be strongly of the view that it was inappropriate to proceed in this manner, and that in respect of a claim where the special damages, as of March 2011, were said to be almost €60,000.00 and continuing, to have given a judgment in this context, without directing a hearing in the normal way, could not be justified. In fact, I do not understand counsel for the respondents to now dispute this proposition.

53. This issue, however, is no longer one of real agitation. In the course of hearing this appeal, there were exchanges between counsel representing the defendants/respondents and the court regarding the Counterclaim. Therefrom I am taking the situation to be that in the event of the respondents being successful and that the appellant’s claim cannot go further, then it would not be his clients’ intention to proceed with the Counterclaim. Whilst I appreciate that only one of his clients was in court, nonetheless, that, so far as I am concerned, was the stated position when this discussion had been finalised.

54. Under s. 71 of the 1957 Act, it is provided that where a cause of action is based on the fraud of the defendant or his agent, or that the right of action is concealed by the fraud of any such person(s), then the appropriate limitation period shall not begin to run until the plaintiff has discovered the fraud or could with reasonable diligence have so discovered it. Somewhere amidst the evidence or submissions or arguments made in this case, there lingers a suggestion that the respondents, as a matter of law, may have enabled the appellant, by their actions, to rely on these provisions. I am perfectly satisfied that this is not the case. As stated on more than one occasion previously, the respondents were registered within a relatively short time of the Deed of Transfer having been executed. Thus, that information had been available for almost seven years before the death of Mrs. Rita McHugh. In such circumstances, whilst the appellant may well feel aggrieved at a moral, social or relationship level that he had not been specifically told of the transfer, nonetheless such cannot be said to create a sustainable ground upon which the provisions of s. 71 may be invoked.

55. The provisions of s. 72 of the 1957 Act, which deals with the commencement of the limitation period where “mistake” is in issue, do not arise for consideration on the facts of this case.

56. Although the discussion travelled far and wide as to what at this point in time the appellant’s real case is, I think that the answer can again be found in an affidavit sworn by him on 20th February, 2015 where, at para. 13, he says:-

“I say and believe and am so advised that the central and core issue of the plaintiff relates to the validity of the said Deed of Transfer and that the plaintiff accepts that he cannot make any case under s. 117 of the Succession Act as against the defendants herein and likewise that it is not appropriate to raise a case on estoppel or legitimate expectation against these defendants.”
One can also recite the following in support, from an affidavit sworn by his solicitor, Michelle Scarry, on 28th October, 2011:-
“4. I say that the core of the Plaintiff’s claim is that he, as executor of his late mother’s estate, under her last Will and Testament made on the 9th July 1987, wishes to proceed with his claim to challenge the validity of a Deed subsequently entered into by his deceased mother and made on the 5th February 1990.
13. I say and believe and am so advised that the central and core issue of the Plaintiff relates to the validity of the said Deed of Transfer and that the Plaintiff accepts that he cannot make any case under s. 17 of the Succession Act as against the Defendants herein and likewise that it is not appropriate to raise a case on estoppel or legitimate expectation against those Defendants.”

57. It is thus clear that the legal challenge is no longer one under the provisions of s. 117 of the 1965 Act, or one based on estoppel or legitimate expectation. One can also add in s. 121 of the 1965 Act, as well as pointing out that the inconsistent claim to adverse possession under s. 49 of the Registration of Title Act 1964, though advanced by Mr. McHugh in his affidavit of 9th July, 1998, is likewise not being pursued. Therefore, his claim is directly based and solely focused on having the Deed of Transfer invalidated, on whatever ground.

58. In that context there are two statutory provisions which must be referred to: the first is s. 9 of the Civil Liability Act 1961, which in its material wording reads as follows:-

“9 – (1) In this section “the relevant period” means the period of limitation prescribed by the Statute of Limitations or any limitation enactment.
(2) No proceedings shall be maintainable in respect of any cause of action whatsoever which has survived against the estate of a deceased person unless either –
(a) proceedings against him in respect of that cause of action were commenced within the relevant period and were pending at the date of his death, or

(b) proceedings are commenced in respect of that cause of action within the relevant period or within the period of two years after his death, whichever period first expires.

59. Section 13 of the 1957 Act is the other provision; subs (2) reads:-

“13 – (2) The following provision shall apply to an action by a person (other than a state authority) to recover land –
(a) subject to subpara. (b) of the subsection, no such action shall be brought after the expiration of twelve years from the date on which the right of action accrued to the person bringing it…
(b) …”

An “action to recover land” is defined in s. 2 of the 1957 Act as including “(a) an action claiming a declaration of title to land …”.
60. References to other potential sections of either the 1957 Act or the 1961 Act do not add anything further to this discussion. Therefore, the provisions of ss. 14, 18 and 46 of the 1957 Act will not be addressed, and neither will s. 7 of the 1961 Act. In addition, I cannot see how, even if he was not bound by the six year period therein provided for, he could hope to invoke s. 45 of the 1957 Act as substituted by s. 126 of the 1965 Act. The decision of the Supreme Court in Gleeson v. Feehan (No 1) [1991] I.L.R.M. 783 confirmed the obiter dictum of McMahon J. in Drohan v. Drohan [1981] I.L.R.M. 473 to the effect that s. 45 of the 1957 Act does not apply to actions brought by a personal representative to recover land from someone in possession thereof. In such circumstances, the twelve year limitation period laid down in s. 13(2) of the 1957 Act applies.

61. At the date of the institution of these proceedings the plaintiff had not obtained a Grant of Probate and his attempted reliance on the provisions of s. 10 of the 1965 Act, as in essence having the same effect as a Grant, is misplaced. It is therefore likely that he was acting in a personal capacity in making and pursuing these claims. I say “likely” because there is the possibility that, in certain circumstances, he could come within the principles as described by Keating at para. 33 above. Indeed, as a matter of fact he did have a Grant when the respondents’ motion came on for hearing before the High Court in November, 2011.

62. However, when one looks at the underlying reality it will be utterly clear that Mr. McHugh’s ambition was to obtain ownership of the subject lands. Obviously he could not do so unless the registered owners, i.e. his brothers, were named as defendants in any such proceedings which he might issue. As these lands were not part of the Estate of the deceased at the date of her death, it is impossible to see any point in suing the Estate, even if all of the other infirmities above described had been resolved. Certainly without the Deed of Transfer being set aside and for so long as that remained the position, the lands simply stood outside the Estate and thus no possible benefit could be obtained by the plaintiff in suing the Estate, given his intended purpose. Therefore, I cannot agree that it can be said that the instant cause of action was one which fell within the provisions of s. 9 of the 1961 Act. Consequently, it has to follow that the within proceedings could not be statute barred by virtue of these provisions.

63. In my view, however, the correct way of assessing and thus of approaching this case is to consider that the proceedings had been instituted in the plaintiff’s personal capacity, with the intention of recovering the lands in question for his sole use and benefit. Therefore, the most pertinent statutory provision must be s. 13 of the 1957 Act.

64. It will be recalled that the Deed of Transfer was dated the 5th February, 1990, and that the respondents became the registered owners on the relevant Folio as of the 19th February, 1991. Therefore, any such action for the intended purpose, even if properly formulated, would have to be instituted within twelve years from the date when the right of action accrued. Given that the Plenary Summons did not issue until the 4th March, 2004, it obviously follows that such proceedings were out of time in respect of the cause of action so construed. As there is no applicable provision by which the period may be extended, that statutory barrier of itself has the effect of preventing the appellant from continuing with the claim as so framed.

65. Even if, however, I should be incorrect in this regard, and that it could be said that the appellant was acting in either an executor capacity or some capacity equivalent or analogous to that, then quite evidently he could not as a matter of law act in effect as prosecutor and defender in the same cause of action. Furthermore, and again notwithstanding what I have said, if the claim, despite the most unconventional and not altogether clearly understood manner of how it is pleaded, is to be regarded as one against the estate of the deceased person, then under the provisions of s. 9(2) of the 1961 Act, it is self evident that the same would be statute barred.

66. Therefore, whichever way one approaches this case, it seems to me that as a matter of a statutory limitation, which cannot be extended, these proceedings are bound to fail. Accordingly, for these reasons I would dismiss the appeal.

Allied Irish Bank Plc v Pollock

[2016] IEHC 581

Neutral Citation; [2016] IEHC 581
THE HIGH COURT
[2015 No. 407 S]

BETWEEN

ALLIED IRISH BANKS PLC
PLAINTIFF
AND
MARY POLLOCK, WILLIAM ROCHE AND JUSTIN SULLIVAN

DEFENDANTS

JUDGMENT of Ms. Justice Baker delivered on the 21st day of October, 2016.
1. Allied Irish Banks plc (the “Bank”) seeks judgment against the defendants arising from two loan facilities both of which were made in 2009 in the respective sums of €519,803.01 (“facility one”) and €2,236,953.60 (“facility two”). Both loans were accepted by the borrowers in the Bank’s written form of acceptance and signed on 20th July, 2009 and the monies drawn down on 31st August, 2009. The loans were secured over certain real property in the title of the first defendant and her now deceased husband, Tom Pollock. This judgement is given in the claim by the plaintiff against the second defendant only as the personal representative in the estate of Mr. Pollock. The claim against the third defendant has been discontinued, and judgment has already been granted against the first defendant, Mrs. Pollock.

2. When the matter came on for hearing before me on a motion for summary judgment, counsel agreed that the appropriate way to deal with the action against the estate of the deceased was to deal with the preliminary point of law arising, whether the action against the estate was statute barred. In those circumstances the matter was adjourned to enable the preparation of legal submissions and the matter was reconvened for further argument.

3. It is well established that the court has a jurisdiction to determine an issue of law on the hearing of a summary motion and Clarke J. in McGrath v. O’Driscoll & Ors. [2006] IEHC 195, [2007] 1 ILRM 203, made it clear that the court could determine such a question provided:

“…the issues which arise are relatively straightforward and where there is no real risk of an injustice being done by determining those questions within the somewhat limited framework of a motion for summary judgment.”
4. The correct approach appears to me to be explained by the Supreme Court in Danske Bank a/s trading as National Irish Bank v. Durkan New Homes & Ors. [2010] IESC 22, that the court may, but is not obliged to, determine a matter of law on a motion for summary judgment.
5. The matter which arises in this case is not one which engages issues of disputed facts. I consider that there is no risk of injustice being done to either party should I determine the question of the accrual of the cause of action on the motion for summary judgment, because both counsel have been given an opportunity to furnish written submissions, there is no disputed fact, and the question is one that can be determined on a consideration of the legal principles and arguments, and on a true construction of the written contract documents.
Facts
6. Thomas Pollock died on 7th November, 2010 and a grant of probate issued in his estate to one of his executors, William Roche, on 22nd January, 2015, the other executor, the third defendant, having renounced his right to probate.

7. The estate of the deceased argues that by virtue of s. 9 of the Civil Liability Act 1961 (the “Act of 1961”) the claim against the estate is statute barred, the proceedings not having been commenced within two years of the death of the deceased on 7th November, 2010. Proceedings were commenced on 3rd March, 2015 and the question of whether the action is time barred is the sole matter that I deal with in this judgment.

8. Section 9 of the Act of 1961 applies to a cause of action which subsisted at the date of the death and not a cause of action which arose after death. Whether the cause did subsist at the date of death of Mr. Pollock is the matter to considered.

9. No demand for payment was made at any time prior to 7th November, 2010, and the Bank does not present any argument that any valid letter of demand was served until 4th February, 2015, after a grant of probate had issued in the estate of the deceased. If the cause of action can be said to accrue only when demand was made, then the action is not one to which the provision of s. 9(2) apply, the six year time limitation provided by the Statute of Limitations 1957 is the relevant limitation, and the proceedings are not statute barred.

10. The case then comes down to a determination of two questions:

(a) The date of the accrual of the plaintiff’s cause of action against the second defendant, and whether the cause of action was subsisting at the date of the death of the deceased; and
(b) Whether the proceedings are now capable of being maintained by the Bank against the second defendant having regard to ss. 8 and 9(2)(b) of the Act of 1961, as amended.

The loan sanctions
11. The claim in debt arises from two facilities contained in a letter to the first defendant and the deceased, and it is accepted that, although the language used in the operative parts of the letter is somewhat different, a proper construction should yield the result that each of them was repayable in the same manner and at the same time.
12. Facility one contained a clause dealing with the obligation of the borrower to repay the monies as follows:

“Repayment: On demand and at the pleasure of the Bank, subject to clearance in full by way of refinance or otherwise by 30/09/2009. Monthly reductions of €5,000 to apply in the interim.”
13. The equivalent clause in facility two reads as follows:
“Repayment: On demand and at the pleasure of the Bank, subject to capital and interest moratorium until 30/09/2009. Facility to clear in full by way of refinance or otherwise at that stage. Interest to be rolled up within the facility in the interim.”
14. In each case, the purpose of the loan was described as “continuation of existing loan…”, and those existing facilities were identified by reference to the amounts borrowed (or outstanding) in respect of each. The second facility was described as being for the purposes of the continuation of an existing loan facility originally sanctioned to assist with the purchase of investment properties, and to repay the capitalised interest for seven sequential months between December, 2008 and June, 2009.
15. The Bank’s general terms and conditions contain at clause 3 the following sub-clauses:

“3.1.1 Loan account facilities are repayable on demand. However, in normal circumstances, the Bank expects that the loan will be available as stated in the letter of sanction.
3.1.2 Without prejudice to the Bank’s right to demand repayment at any time, the happening of any of the events set out in clause 4.2 may lead to the Bank making demand for payment, with or without notice to the Borrower.”

16. General condition 4.2 identifies an “event of default” as follows:
“4.2 A term loan though expressed to be repayable over or within a specified period may be terminated by the Bank and the Bank may demand early repayment at any time with or without notice to the Borrower upon the occurrence of any of the following events:”
17. The relevant events of default were a failure on the part of the borrower to make repayment on the date due, or the death of the borrower or any guarantor of the borrower.
The arguments
18. The plaintiff argues that the cause of action against the second defendant accrued only when a valid demand was made by the plaintiff against the estate of the deceased. The evidence is that a letter of demand was served on 4th February, 2015 following the extraction of a grant in the estate of the deceased. The Bank does not rely on an earlier letter of demand sent on 13th May, 2013.

19. The net question to be decided is whether the monies became due and owing to the Bank only following demand, or whether they were due on the passing of the date of redemption, being 30th September, 2009.

20. It is argued by the plaintiff that it cannot have been the intention of the parties that the loan agreed to be advanced by facility one was payable in full and without demand some six or seven weeks after the loan was accepted. It is argued that regard be had to the fact that provision was made for monthly repayments, and the plural was used, and the letter of offer expressly provided that the impact of changes in interest rates would not be reflected in any adjustment of the instalments.

21. It is argued also, that a failure to repay on 30th September, 2009 was an “event of default” entitling the Bank to demand payment, and the passing of the date of redemption did not in itself entitle the Bank to commence the proceedings without demand first being made.

22. The second defendant argues that by virtue of Clause 3.1.1 the loans, while they were payable on demand, were to be available as stated in the letter of sanction, i.e. they were available as short term facilities only, to be repaid on or before 30th September, 2009. It is said that on a true construction of this general condition when combined with the special conditions, the Bank could demand payable early on the happening of any of the events identified as an event of default, but absent such, the loans had an identified redemption date, and were repayable without demand on that date.

23. Counsel argues that general condition 4.2 means that the Bank could demand early repayment of a fixed term loan, but that the Bank did not require as matter of contract to make demand at the end of that specified and agreed term. Demand was required to request early repayment, but not payment on the agreed redemption date. It is argued that on a construction of the language of the contract, and using the ordinary canons of construction, that the facilities were repayable on or before 30th September, 2009, or on earlier demand by the Bank on the happening of the fifteen different circumstances expressly provided in clause 4.2 of the general conditions.
Legal principles
24. The matter gives rise to a question of the construction of the general and special conditions of the loan facilities. That the special conditions will prevail where there is any difference between applicable special conditions and the general conditions is not in doubt.

25. The parties are agreed as to the principles to be applied in the interpretation of the contract and both rely on the leading judgment of the Supreme Court in Analog Devices B.V. & Ors. v. Zurich Insurance Company & Anor. [2005] IESC 12, [2005] 1 IR 274, in which the Court adopted the principles set out by Lord Hoffman in Investors Compensation Scheme Ltd. v. West Bromwich Building Society [1998] 1 WLR 896, the relevant elements of which are as follows:

a. The construction of a contract must seek to ascertain the meaning that the document would convey to a reasonable person in the position of the contracting parties.
b. The matrix of fact or background information may be relevant in order to construe the language of the document.

c. Previous negotiations and any declarations of subjective intent are disregarded.

d. The meaning of a document cannot be reduced to an analysis of the meaning of its words taken in isolation, or viewed as a sterile exercise of looking at dictionaries or syntax.

e. A result that flouts basic common or commercial sense must yield to one which does make sense.

26. These principles have been analysed and adopted in a number of cases in the Superior Courts of Ireland, albeit that Fennelly J. in ICDL GCC Foundation FZ-LLC v. European Computer Driving Licence Foundation Limited [2012] IESC 55, [2012] 3 I.R. 327 cautioned against the use of these general principles as a tool of speculation. It is useful to quote the approach he preferred, that of Griffin J. in Rohan Construction Limited & Ors. v. Insurance Corporation of Ireland plc [1988] I.L.R.M. 373:
“It is well settled that in construing the terms of a policy the cardinal rule is that the intention of the parties must prevail, but the intention is to be looked for on the face of the policy, including any documents incorporated therewith, in the words in which the parties have themselves chosen to express their meaning. The court must not speculate as to their intention, apart from their words, but may, if necessary, interpret the words by reference to the surrounding circumstances.”
27. That approach, which I adopt, requires that the court should commence “with an examination of the words used”, and interpret these in accordance with their “natural and ordinary meaning”. Evidence of surrounding circumstances “will not normally be allowed to alter the plain meaning of words”.
28. Another relevant canon of construction is that the court construes the contract in its entirety, as expressed in Marathon Petroleum (Ireland) Limited v. Bord Gáis Éireann [1986] IESC 6 which at p. 11 contains the following dicta of Finlay C.J.:

“… my obligation is to seek in the terms of the entire Agreement evidence of the real intention of the parties and that, if I can find it, that should prevail over the ordinary meaning of the words.”
29. The exercise therefore seems to me to involve the following steps:
a. The court should first look at the ordinary meaning of the relevant words in the contract.
b. The court should interpret the contract as a whole.

c. Ambiguity should be resolved by reference to the surrounding circumstances in order to ascertain the intention of the parties.

Was demand necessary after the passing of the redemption date?
30. The Bank argues that demand was necessary to trigger the accrual of the cause of action. Counsel for the second defendant argues that no demand was required of the borrower, and that the making of a demand was not a condition precedent to a right of action accruing. Both counsel rely on a statement of principle contained in Canny, Limitation of Actions (2010) that:
“If monies are loaned it is a matter of construction of the contract to determine the date from which the limitation period will run. If a time for repayment is stipulated, time will run from that date.” (para. 6.09)
31. Canny goes on to suggest that time can start running the moment a loan is advanced, and that this is:
“… a rule of some antiquity, and although it has been applied in subsequent cases, the decisions all emphasise that one must examine the terms of the agreement to ascertain whether the making of a demand was in fact a condition precedent to a right of action accruing.”
32. I adopt that statement as a correct statement of the law, albeit it cannot determine the question of construction arising in the present case.
33. A similar proposition stated in Donnelly, The Law of Credit and Security (2nd ed., 2015) is also relied on:

“Loan agreements may be expected to make provision for repayment. The way in which a lender may require repayment of a loan depends on the type of loan involved. Overdrafts are generally repayable ‘on demand’ while, in the absence of default, term loan repayments fall due on a specified date or dates, the details of which will be provided in the loan contract. If a date for repayment is set out in the contract, there is no obligation on the lender to make a further demand for repayment. The monies will automatically fall due when the date arrives.” (para. 7-90)
I also accept that this is a correct statement of the law, but again note that it does not answer the question of construction in this case.
34. Counsel for the plaintiff relies on the approach taken by Dunne J. in Start Mortgages Limited & Ors. v. Gunn & Ors. [2011] IEHC 275. Judgment was given in a number of different cases with differing loan conditions. In one of these, the case involving the application against Mr. and Mrs. Clair, it was submitted on behalf of the bank that demand was not necessary, and that accordingly the application for possession came to be considered on the basis that the right of action had accrued before the coming into operation of the Land and Conveyancing Law Reform Act 2009. Because the judgment of Dunne J. was concerned with a different legal question she did not engage in any analysis of the question that arises before me.

35. The Supreme Court considered the nature of a loan contract in Irish Life & Permanent plc v. Dunne [2015] IESC 46, [2015] 2 I.L.R.M. 192. In the course of his judgment, at para. 6.6, Clarke J. identified precisely the question that arises for consideration in the present case, namely whether principal monies “had become due”, and noted that loan documentation can differ such that in some cases the principal monies borrowed become due without demand, and in other cases demand is due before a default can be said to have occurred.

36. With regard to a provision in the mortgage under consideration by him in one of the two cases with which the judgment dealt, the mortgage deed provided that the debt should “become immediately payable to Permanent TSB” if the mortgagee defaulted in the making of two monthly instalments of payment. Clarke J. said that no letter of demand or other action on the part of the lender was needed for the total sum to become due. As he put it at para. 6.9:

“That provision is automatic in its effect.”
37. While that judgment, of course, is one which rests on its facts and the terms of the contract, it shows that the construction of loan documents can lead to a conclusion that monies borrowed under a loan contract can become due without demand, and that a cause of action can thereby be said to have accrued without demand.
38. Counsel for the plaintiff, however, argues that the loan documentation in the present case does not contain any express provision as a result of which it could be said that the loan monies became payable “immediately” upon the happening of a certain event, or in particular on the passing of the redemption date, and that the reasoning of Clarke J. can be distinguished.

39. The word “immediately” was also found in First Southern Bank Limited v. Maher [1990] 2 I.R. 477, relied on by the second defendant, but which the plaintiff argues is readily open to being distinguished. In that case, the terms of a promissory note provided that an event of default occurred if a payment was not made within one month of its due date. Barron J. took the view that while demand could in many cases be necessary to call in a current account or liability under guarantee, no demand was necessary and the money became due and payable once there was default for the period identified, and held that the cause of action had accrued when the monies became “due and payable” and that as the action was not pursued until more than two years after the death of the debtor it was barred by the provisions of s. 9(2) of the Act of 1961.

40. Bank of Ireland v. Stafford [2013] IEHC 546, a judgment of McGovern J. is not, it seems to me, on point as the third defendant there argued that while death was an event triggering default, demand for payment was still required to be made and as that demand was made after the death of the deceased, the claim was not one which was subsisting at the date of his death, or not one that survived against the estate, but rather an action which accrued after death.

41. In the present case both facilities were repayable on demand and at the pleasure of the Bank, but in each case that provision was made expressly “subject to” clearance in full by 30th September, 2009. In my view, the use of the phrase “subject to” as a matter of plain language, and without a need to engage in complex grammatical analysis or analysis of syntax, indicates that the earlier more general provisions are to be constrained, delimited or read to be understood as being dependent upon, or conditional upon, or contingent upon, the express requirement that repayment be made by the date identified. The terms of repayment in their clear and ordinary meaning, and subject to what I say below, must be read as meaning that the intention of the parties was that the monies would be repaid on or before 30th September, 2009.

42. I do not consider that the absence from the express repayment provisions that repayment be made immediately upon the happening of identified events leads to the conclusion that payment was therefore not due on 30th September, 2009. The express words are clear, and identify a date for repayment, and the inclusion of the word “immediately” or of a similar word, could have added nothing to the sense of the clause because the date was identified by day, month, and year. Payment became due on that date without demand, and, to borrow the language of Clarke J in Irish Life & Permanent plc v. Dunne, the right to take action on foot of a failure to pay on the agreed date happened automatically.
The construction might lead to an absurdity?
43. The plaintiff argues that the construction for which the second defendant contends is one that would lead to an absurdity, in that the loans would have been advanced and become repayable within less than three months of drawdown. The letter of loan sanction was made on 14th July, 2009 and accepted on 20th July, 2009.

44. That argument might find favour were one to ignore some of the other elements of the loan sanction. Both loan sanctions were by way of a “continuation of existing loan facility”. It was anticipated, or at least hoped, in the context of each of the facilities that the loan amounts would be either repaid or refinanced. These therefore were short term facilities, and in the case of the second facility not merely by way of continuation of existing loan facilities, but also in the context where interest had been capitalised from the periods between December, 2008 and June, 2009 inclusive, a total of seven months. It is clear in those circumstances that the two sanctions were given in a context where there were already arrears of interest and capital payments, at least in respect of the second loan. There is in the circumstances nothing intrinsically absurd or contrary to good commercial or common sense that persuades me that the facilities could not reasonably be interpreted as being short term, or indeed very short term. On the contrary, I construe both facilities as being short term facilities which were intended to be refinanced or repaid on or before 30th September, 2009.
The provision for instalment payments
45. Counsel for the plaintiff argues that the facilities are not to be interpreted as being repayable within the short timeframe for which the second defendant contends, because provision is made for instalment payments by the express terms of the first sanction, by which monthly reductions (the plural is used) of €5,000 are to apply “in the interim”. In the second facility none such is provided.

46. It is accepted that the monthly payment of €5,000 was not sufficient to meet payment of capital and interest on the loans on an ongoing basis. The special conditions of the first facility were intended as an interim measure, and the existence of such a provision does not make it absurd, the loan facility being one of a short term nature. In that context the fact that provision was made for instalments in respect of one facility only suggests that the instalment was not an important factor in the arrangements, and this is consistent with the express provision for repayment in full on the redemption date. Instalment payments would almost always be found in a long term facility, but would not be required as a matter of commercial sense in a short term facility.

47. I do not consider that the provision for instalments varies or relaxes the agreement that repayment in full be made by the redemption date, and it does not persuade me that demand was necessary before the right of action accrued.
The general conditions – events of default
48. Counsel for the plaintiff identifies general condition 4.2 as being of particular importance. It provides that a term loan may be terminated by the Bank at any time without notice to the borrower on the happening of certain events. It does not provide that demand must be made once the redemption date has passed, but identifies other events of default giving rise to an entitlement of the Bank to seek repayment in full. It does not assist the plaintiff with regard to when and how default occurs when payment is not made on the agreed date.

49. Clause 3.1.1 does provide that loan account facilities are “repayable on demand”. That general proposition is subject to the proviso that “in normal circumstances” the Bank expects that the loan will be available as stated in the letter of sanction. That general condition is further qualified by clause 3.1.2 by which the Bank reserved unto itself the right to demand payment on the happening of an event of default.

50. The provisions of clause 3.1.1 and 3.1.2 are an expression of the general intention of the parties that, while the Bank could demand payment at any time, the Bank would not demand payment early against a compliant borrower. The general conditions further qualify that general proposition by identifying a number of events, the happening of which entitle the Bank to make demand, irrespective of whether an argument could be made that the borrower is otherwise compliant.

51. I read the provisions of clauses 3.1.1 and 3.1.2 as qualifying the nature of the Bank’s entitlement to demand payment at any time, and not as a provision which when properly interpreted means that formal demand is required at any time when a borrower is in default. That approach is consistent with another canon of construction, namely the obligation that the court would look at the relevant words in the context of the entirety of the contract.
Conclusion
52. I cannot accept the argument of the plaintiff that taking the contract as a whole the loan facility was repayable only on demand. I consider in all the circumstances that it was repayable on or before 30th September, 2009, that it was a contract for a fixed term at the end of which the money became repayable in full, either from the resources of the borrowers or by refinance. There was, in those circumstances, no requirement that the Bank demand payment on 30th September, 2009.

53. As a consequence, I consider that the cause of action accrued on 30th September, 2009. The action therefore is one which existed at the date of death of the deceased, Thomas Pollock, who died on 7th November, 2010, and in respect of which the two-year time period provided by s. 9 of the Act of 1961 applies.

54. I consider that the argument that I would consider this contract in the context of the contra proferentem rule is not correct, as the rule is a “last resort” to be used by the court in aid of the construction of an ambiguous clause: ICDL GCC Foundation FZ-LLC v. European Computer Driving Licence Foundation Limited (per O’Donnell J. at para. 166).

55. No ambiguity arises which requires that this principle be called in aid of construction.
Was there an acknowledgment?
56. The plaintiff argues that the estate, through the second defendant, made an acknowledgment and/or an admission against interest. Two relevant affidavits are referred to. One is an affidavit sworn on 10th April, 2014 in the context of the application to remove a caveat, and the other is the Inland Revenue affidavit sworn on 8th November, 2013.

57. Section 58(2)(b) of the Statute of Limitations Act 1957 provides as follows:

“[An acknowledgement under s. 56] shall be made to the person or the agent of the person whose title, right, equity of redemption or claim (as the case may be) is being acknowledged.”
58. I accept the argument of the second defendant that the Inland Revenue affidavit and the affidavit grounding the application to remove the caveat are not, and could not, be characterised as an acknowledgment to the Bank or any agent of the Bank. In that I follow the judgment of the Court of Appeal for England & Wales in Bowring-Hanbury’s Trustee v. Bowring-Hanbury [1943] 1 Ch. 104 which held that the Revenue probate affidavit was not an acknowledgement to the relevant creditor. I also note the judgment of Slade J. in Re Compania De Electricidad De La Provincia de Buenos Aires Ltd. [1980] 1 Ch. 146, where he noted that a written acknowledgement had to be made to a creditor or his agent.
59. Neither affidavit could be said in any sense to have been made to the Bank nor any agent of the Bank, and neither can for that reason be characterised as an acknowledgement in writing of the indebtedness of the estate to the Bank.

60. I was advised at the closing of the submissions that documentation may exist in the form of correspondence on which the Bank might wish to rely, but subject to hearing from counsel with regard to any other argument that an acknowledgement was made such that the running of time is to be differently construed, I answer the preliminary issue in this case as follows.
Decision
61. The cause of action of the Bank against Thomas Pollock, deceased accrued on 30th September, 2009. Mr. Pollock died on 7th November, 2010 and as a result of the provisions of s. 9(2)(b) of the Act of 1961, as amended, the action against the deceased was required to be brought within two years of his death. The action was one which, pursuant to s. 8 of the Act of 1961, did subsist against the deceased and survived against his estate but only for the period of two years provided by s. 9.

62. The action against the second defendant is barred by statute.

 

 

Krops v. The Irish Forestry Board Ltd.

[1995] 2 IR 115
Keane J.

 

Keane J.
6th April 1995

There is before me an application to amend the statement of claim in this action in which the plaintiff is claiming damages arising out of the death of his wife, Sonja Krops, on the 28th May, 1990.
The plaintiff says that while he and his wife were driving on the public road near Aughavanna, County Wicklow, a tree on land adjoining the road fell on their car, as a result of which his wife was killed. The statement of claim, as originally delivered, alleged that the tree had fallen as a result of the negligence, breach of duty and breach of statutory duty of the defendants, or either of them, in the felling of trees in that area. The present application is to amend para. 4 of the statement of claim by the insertion of the words “and nuisance” after the words “breach of statutory duty”. The amendment is resisted by the first defendant on the grounds that it would deprive them of a defence that could otherwise be open to them under the relevant limitation enactment, i.e. s. 48, sub-s. 6 of the Civil Liability Act, 1961, the proceedings not having been instituted within three years of the death of Mrs. Krops. The solicitor for the plaintiff said in an affidavit that the necessity to amend the pleadings so as to include a claim for nuisance only became evident when senior counsel recently advised on proofs.
It was also pointed out that the second defendant had not been given notice of the application nor had his consent been sought to the amendment. However, it was accepted by Mr. Keane on behalf of the first defendant that no useful purpose would be served by adjourning the motion so as to enable that party to be given notice.
It was accepted that the proposed amendment did not involve the pleading of any new facts. The plaintiff, in effect, wished to put himself in a position to argue at the hearing that, if the facts as proved failed to establish that the defendants or either of them had been guilty of negligence and breach of duty, including breach of statutory duty, they did establish that the defendants, or either of them, had been responsible for a user of the land adjoining the public road which amounted to a nuisance in law.
The application was made under O. 28, r. 1 of the Rules of the Superior Courts, 1986, which provides that:”
“The Court may, at any stage of the proceedings, allow either party to alter or amend his indorsement or pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties.”
On behalf of the plaintiff, Mr. Finlay accepted that the contention of the defendants that they should not be deprived of a defence under the Statute of Limitations, 1957, otherwise open to them by an amendment of the plaintiff’s pleadings was supported by the decision of the English Court of Appeal in Weldon v. Neal (1887) 19 Q.B.D. 394. He submitted, however, that the statement of the law in that case should not be applied in its full rigour to a case such as the present where no new facts were alleged and where, in the result, the defendants would not be prejudiced in any way by the proposed amendment.
On behalf of the defendant, Mr. Keane submitted that English authorities subsequent to Weldon v. Neal (1887) 19 Q.B.D. 394 demonstrated that the principle laid down in that case was not confined to applications to amend the pleadings based on new allegations of fact. The principle was applicable in every case where the amendment would deprive a defendant of the capacity which he would otherwise have, as a matter of statutory right, to rely on a limitation defence.
Reference was also made in the course of argument to certain provisions of the Rules of the Supreme Court, 1965, in England which had altered the law in that jurisdiction. Order 20, r. 5 provides that:”
“(1) Subject to O. 15, rr. 6, 7 and 8, and the following provisions of this rule, the Court may at any stage of the proceedings allow the plaintiff to amend his writ or any party to amend his pleading on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct.
(2) Where an application to the Court for leave to make the amendment mentioned in paras. (3), (4) or (5) is made after any relevant period of limitation current at the date of the issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph, if it thinks just to do so . . .
(5) An amendment may be allowed under para. (2), notwithstanding that the effect of the amendment would be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.”
This amendment was clearly intended to enable the courts in England to grant an amendment of the pleadings in circumstances such as the present. However, it was argued on behalf of the defendants that, since no similar amendment had been effected in the Rules of the Superior Courts when they were made by the rule making authority in 1982, the law in this jurisdiction remained the same as the law had been in both jurisdictions prior to 1965.
In Weldon v. Neal (1887) 19 Q.B.D. 394 the plaintiff had commenced an action for slander but was non-suited at the trial, because the alleged slander was not actionable without special damage. The plaintiff had not alleged any special damage and she had been refused leave to amend her pleadings. The Court of Appeal having ordered a new trial and given the plaintiff leave to amend her statement of claim, the amended statement of claim set up, in addition to the claim of slander, fresh claims in respect of assault, false imprisonment and other causes of action. The latter, at the time of the amendment, were barred by the Statute of Limitations, 1957, although not barred at the date of the writ.
The paragraphs stating the fresh causes of action were ordered to be struck out on the ground that amendments ought not to be allowed which would deprive the defendant of the benefit of the Statute of Limitations, 1957, and the plaintiff appealed. The Court of Appeal (Lord Esher M.R., Lindley and Lopes L.JJ.) dismissed the appeal in an unreserved judgment. Lord Esher said:”
“We must act on the settled rule of practice, which is that amendments are not admissible when they prejudice the rights of the opposite party as existing at the date of such amendments. If an amendment were allowed setting up a cause of action which, if the writ were issued in respect thereof at the date of the amendment, would be barred by the Statute of Limitations, 1957, it would be allowing the plaintiff to take advantage of her former writ to defeat the statute and taking away an existing right from the defendant, a proceeding which, as a general rule, would be, in my opinion, improper and unjust. Under very peculiar circumstances, the Court might perhaps have power to allow such an amendment, but certainly as a general rule it will not do so.”
Lindley and Lopes L.JJ. concurred.
It will be observed that, although the rule was stated in reasonably wide terms in that decision, it was abundantly clear that the plaintiff was seeking, not merely to add new causes of action to that already pleaded, but to make fresh allegations of fact which had never been pleaded, in circumstances where the Statute of Limitations had already run. Nevertheless, the rule as stated in such general terms came to be seen as unduly restrictive of the general power of the court to amend pleadings where it seemed just to do so and, in particular, where it was necessary to determine the real question in issue between the parties. Thus, almost a century after it had been laid down by the Court of Appeal, Edmund Davies L.J. in Brickfield Properties Ltd. v. Newton [1971] 3 All E.R. 328 at p. 341 referred to the attempts of the courts “to extricate themselves from the deadening hand of Weldon v. Neal “.
That the rule was capable of producing what seemed, at the least, harsh results, is illustrated by Marshall v. London Passenger Transport Board [1936] 3 All E.R. 83. In that case the plaintiff was injured in a collision between his bicycle and a tram. He issued a writ claiming damages for personal injuries and consequential loss sustained by reason of the negligence of the defendants, their servants or agents. Those proceedings were commenced within the particularly draconian limitation period then in force under the Public Authorities Protection Act, 1893, i.e.six months. The case was remitted to the county court and particulars of claim were delivered, to which were added particulars of negligence setting up a case of negligent driving. Further particulars were then delivered by leave of the registrar, which included an additional plea of negligence against the defendants based on their alleged failure to keep the tram track and highway in repair, this being described as a breach of statutory duty. The County Court Judge had reversed the decision of the registrar and disallowed the amendment and his decision was upheld by the Court of Appeal. The court held that the indorsement on the writ did not contain sufficient particulars of the nature of the claim as it did not specify what duty the defendant had failed to perform. The court, in the result, was of the view that the amendment could not be allowed, since it introduced a new case which was brought outside the limitation period and could not be supported as being within the indorsement on the writ which, as already noted, was held to be in too general terms. Lord Wright M.R. said at p. 88 of the report:”

“As I understand it, the original claim of negligence had been because the defendants’ tram car was driven into and struck the plaintiff, whereas the proposed amendment seems to allege that the bad repair of the road and the tramlines caused the plaintiff to collide with the defendants’ tram car, which is quite a different set out ideas from the idea of negligent driving. In my view, therefore, the proposed amendment would, if allowed, have set up a new cause of action involving quite new considerations, quite a new set of facts, and quite new causes of damage and injury, and the only point of similarity would be that the plaintiff had suffered certain injuries.”
The reluctance of the English courts at a later stage to apply the rule in Weldon v. Neal (1887) 19 Q.B.D. 394 in all its rigour is well illustrated by the fact that, following upon the amendment of the Rules of the Supreme Court to which I have already referred, the Court of Appeal was prepared to hold that, even in cases which did not come strictly within the terms of O. 20, r. 5 (5), the court could permit an amendment of the pleading which deprived the defendant of a defence under the Statute of Limitations by the exercise of its general jurisdiction under O. 20, rule 5 (1). Lord Denning M.R. in Chatsworth Investment Ltd. v. Cussins (Contractors) Ltd. [1969] 1 W.L.R. 1 said:”
“The new rule of the Court in O. 20, r. 5 (2), (3), (4) and (5), has specifically overruled a series of cases which worked injustice. Since the new rule, I think we should discard the strict rule of practice in Weldon v. Neal . The Court should give O. 20, r. 5 (1) its full width. They should allow an amendment whenever it is just to do so, even though it may deprive the defendant of a defence under the Statute of Limitations.”
Lord Denning M.R. reiterated this view in Sterman v. E.W. and W.J. Moore (A Firm) [1970] 1 Q.B. 596 at p. 604 and Salmon L.J. concurred (at page 605). However, a different view was taken by Widgery L.J. in Braniff v. Holland and Hannen and Cubitts (Southern) Ltd. [1969] 3 All E.R. 959, the learned judge finding it difficult to think that, when specific exemption was made in rr. 5 (3), (4) and (5) in cases where the statute had run, it was legitimate to interpret the rule as making a similar provision available in cases which were not within the precise terms of those three paragraphs. In Brickfield Properties Ltd. v. Newton [1971] 3 All E.R. 328, Sachs L.J. was prepared to follow the approach of Lord Denning M.R., but the other members of the court (Edmund Davies and Cross L.JJ.) expressed reservations as to its correctness. Ultimately, this controversy was resolved in England by the legislature in s. 35, sub-s. 2 of the Limitation Act, 1980, the effect of which is summarised in the Supreme Court Practice, 1995, volume 1 at para. 20/5 ” 8/7 as follows:”
“The effect of this provision is to support the view expressed in Braniff v. Holland and Hannen and Cubitts (Southern) Ltd. ; Brickfield Properties Ltd v. Newton per Edmund Davies L.J. and per Cross L.J. and expressly and pointedly to negative any decision, dictum or notion that O. 20, r. 5 (1) and (2) provide a wide discretion, and in some way allow a general relaxation against the governing principle that any amendment after the expiry of the limitation period will not be allowed, thus negativing per Lord Denning in Chatsworth Investment Ltd. v. Cussins (Contractors) Ltd. and in Sterman v. E.W. and W.J. Moore (A Firm); per Salmon L.J. ibid; and per Sachs L.J. in Brickfield Properties Ltd. v. Newton .”
I have referred to these authorities in England subsequent to Marshall v. London Passenger Transport Board [1936] 3 All E.R. 83, which were not cited by counsel on the present application, merely for the sake of completeness. In the absence of any rule in Ireland corresponding to the English rule of 1965, the question as to whether the court should apply the practice referred to in Weldon v. Neal to the circumstances of the present case must be determined by reference to principle rather than authority. I am proceeding on the assumption, again not debated in argument, that the High Court is not bound by decisions of the English Court of Appeal prior to 1921, although it will not lightly depart from a decision of that court which has been repeatedly acted on without demur in this court. I also approach the question on the basis that, so far as the researches of counsel and myself go, there is no Irish authority to guide me.
Treating it as a matter of principle, I think one can start by positing a somewhat extreme set of circumstances. A person is injured in a traffic accident and issues proceedings within the limitation period. In his statement of claim, he described the accident as having happened in O’Connell Avenue, Finglas, County Dublin. In fact, the point at which the accident occurred is in the city of Dublin. A pedantic counsel asks the court to permit an amendment of the statement of claim. At this stage, the limitation period has run. The trial judge allows the amendment notwithstanding that the limitation period has expired, on the ground that Weldon v. Neal has no application as neither a new cause of action nor any new facts of any significance are being added.
It is obvious that in such a case the defendant is not deprived of any defence under the Statute of Limitations, 1957: he never had such a defence in the first place since the plenary summons and statement of claim were issued within the limitation period. That example simply serves to illustrate that the pleadings which initiate an action in this court carry with them from the time they are issued or delivered the potentiality of being amended by the court in the exercise of its general jurisdiction to allow a party to amend his indorsement or pleadings “in such manner and on such terms as may be just”. Where, as here, an amendment, if allowed, will not in any way prejudice or embarrass the defendant by new allegations of facts, no injustice is done to him by permitting the amendment. In that sense, it is true to say that the amendment does not in truth deprive him of a defence under the Statute of Limitations, 1957: since the proceedings were always capable of amendment in such manner as might be just and in order to allow the real question in controversy between the parties to be determined, it cannot be said that the defendant was at any stage in a position to rely on the Statute of Limitations, 1957.
The evolution of the law in the neighbouring jurisdiction demonstrates, I think, that the difficulties that have arisen can be traced, not so much to the decision in Weldon v. Neal , as to an over rigid application of the principle laid down in that case. Where, as here, the plaintiff seeks to add a new cause of action arising out of ” to borrow the words of the English rule ” “the same facts or substantially the same facts”, there seems no reason why this court, even in the absence of a corresponding rule in this jurisdiction, should be precluded from permitting such an amendment.
I will, accordingly, allow the amendment sought.

 

Croke v Waterford Crystal Ltd

[2005] 1 I.L.R.M. 321

JUDGMENT of Mr. Justice Geoghegan delivered the 26th November 2004

INTRODUCTION

This is an appeal brought by the above named plaintiff/appellant on a single notice of appeal from two orders made by the High Court (Smyth J.) on the 20th April, 2004 in two respective interlocutory motions brought by the said appellant in this action. One of the orders of the High Court was an order refusing leave to the appellant to make certain amendments to his Statement of Claim as against both respondents. The other order of the High Court was a refusal of an application by the appellant to be given liberty to deliver and file a Reply to the respective defences of the first and second-named respondents notwithstanding that the time for doing so had long expired.

I should mention at the outset that the title which I have assigned to this judgment is not identical to the title on the notice of appeal. The notice of appeal instead of naming Walter Croke only as the plaintiff and appellant has inserted the following “Walter Croke & Others, Plaintiffs/Appellants”. As this case is one of a large batch of similar cases it seems probable that the legal advisers to the appellant deliberately entitled the notice of appeal in that way so that in some fashion it could be said that the decision of this court bound the other actions. It appears to me, however, that the insertion of the words “& Others” in the notice of appeal was wholly unjustified and wrong having regard to the fact that the two motions the subject matter of this appeal were both brought and headed in one action only, that of Walter Croke. Accordingly, I have thought it appropriate to alter the title of the appeal.

For a proper understanding of the substantive issues in this appeal, it is necessary to outline some further procedural context. This action of the appellant is one of approximately 350 separate actions brought against the respondents by former employees of the first-named respondent who took voluntary redundancy from the first-named respondent for the most part in the early 1990s. It has been suggested on behalf of the respondents that (with a few exceptions) they are essentially what might be described as copycat actions brought after some similar actions by other employees had been settled. Be that as it may, these actions have to be heard and determined at some stage and there was naturally anxiety on all sides that they be suitably managed so that the real issues could be heard and determined in a practical fashion. The appellant and the respondents had different ideas as to what form that management should take. All the parties brought motions for directions which were also heard in the High Court by Smyth J. The respondents’ respective motions were directed towards certain preliminary issues being set down for separate trial. Without going into too much detail, the preliminary issues which the respondents sought to be heard were essentially the issues relating to statute bar and issues as to whether they would have to meet at all claims for fraud, deceit, fraudulent breach of trust and fraudulent misrepresentation on the grounds that these claims were allegedly unsustainable, bound to fail, frivolous and vexatious an abuse of the process of the court and that at any rate the pleadings failed to disclose any such causes of action.

Essentially, the High Court acceded to the respondents’ motions and the appellant appealed to this court from that order in Appeal No. 312/03. The main ground of the appeal was that the learned High Court judge had erred in directing the trial of a preliminary issue where there was a full dispute on the facts and where no affidavits of discovery had been filed.

This appeal came on for hearing before this court on the 16th February, 2004. At the hearing, the court learned that following on the order of Smyth J. the two motions the subject matter of this appeal had been brought in the High Court and had come on for hearing before Finnegan P. who had taken the view that he ought not to deal with them pending the hearing of the earlier appeal to this court from the directions as to a preliminary issue given by Smyth J. This court, however, took the opposite view in that it decided that it was pointless to consider the correctness or otherwise of the directions given by Smyth J. when it was not finally determined whether the Statement of Claim was going to be substantially amended and whether a Reply was going to be delivered to each of the defences. It will be self-evident as to why this court took that view when I explain the nature of the amendments sought in the Statement of Claim and the contents of the proposed Replies to be delivered.
For reasons which will become obvious, it is appropriate that I should first deal with the motions seeking amendments of the Statement of Claim. Before I analyse what the proposed amendments are and what the effect of them is, it is important that I should examine the existing unamended Plenary Summons and Statement of Claim and establish what are the precise causes of action pleaded at present as against each respondent.

Existing pleadings as against first-named respondent

The general endorsement of claim on the Plenary Summons is confined (apart from Courts Act interest and costs) to a damages claim for eight different causes of action. These are deceit, “fraud and/or fraudulent breach of trust”, fraudulent misrepresentation, breach of duty, breach of fiduciary duty, negligent misstatement, breach of statutory duty and breach of contract. Claims for damages for each of these eight causes of action in the same wording and the same order constitute the prayer in the Statement of Claim. Apparently, these claims have been made in most but not, I think, all the actions even though it is not conceded that the relevant facts are the same in each case. No differentiation is made as between the two respondents in either the Plenary Summons or the prayer part of the Statement of Claim. It is trite law that a cause of action merely mentioned by name in the prayer does not and cannot in any sense constitute the pleading of such cause of action. It is, therefore, necessary to look at the main body of the Statement of Claim. It is important that I should do so separately in relation to each respondent.

Starting with the first-named respondent, paragraph 5 explains that at all material times there was a pension scheme which had been instigated by that respondent for the benefit of its employees and, therefore, including the plaintiff who was such an employee. The paragraph goes on to say that the pension scheme was constituted by a declaration of trust made by the second-named respondent, as amended, and a subscriber’s agreement form executed by both respondents and that at all material times the second-named respondent was the sole trustee of the pension scheme while the day to day administration was the joint responsibility of both respondents. No cause of action of any kind is pleaded in that particular paragraph.

Paragraph 6 goes on to explain that as part of a process of rationalising its operations and reducing the number of employees, the first-named respondent made available to its employees voluntary redundancy packages.

Paragraph 7 sets out that the appellant made enquiries in relation to the possibility of his ceasing his employment with the first-named respondent and accepting a voluntary redundancy package and that it was allegedly represented to him by a servant or agent of the first-named respondent that the only options available to the appellant were to either accept the voluntary redundancy package which was offered to him or to refuse it and that if he was to refuse the voluntary redundancy package he would be transferred to a different section of the first-named respondent’s undertaking where he would earn considerably less than he had been accustomed to earning.

Paragraph 8 pleads that at the time of the making of these representations, the first-named respondent intended and well knew that the appellant would rely thereon and would be induced thereby to accept the voluntary redundancy package which he was being offered and would accept a net refund of his contributions to the pension scheme thereby losing any rights which he had acquired under the said scheme. I would just pause there in order to signpost what seems to be some kind of plea or certainly more than a hint, of deliberate misconduct on the part of the first-named respondent even if the word “fraud” or an equivalent word is not expressly used.

The Statement of Claim goes on to plead that the appellant relied on the representations and received a lump sum payment which included a repayment of the contributions made by him to the pension scheme less a percentage deduction to take account of income tax, but that he had since discovered and that the fact allegedly was that the representations were untrue in that at the material time, the appellant allegedly had acquired valuable pension rights under the scheme and that there were a number of options open to him including the transfer of the value of his interest in the scheme to some other pension scheme approved by the Revenue Commissioners or opting for a deferred pension payable from age sixty-five based under the level of contributions made by him. The appellant then pleads that had these options been communicated to him he would have opted for the deferred pension.

In paragraph 12 it is stated that the first-named respondent “being the party responsible for the instigation and day to day administration of the pension scheme and/or by reason of the implied terms of the plaintiff’s contract of employment and/or by reason of its relationship and proximity to the plaintiff owed duties to the plaintiff.” The paragraph goes on to list six such duties. Essentially, they were all related to duties to ensure that the appellant knew what he was at and had proper advice. Paragraph 13 pleads the breaches of these duties. These are for the most part couched in negative terms that is to say, they are particular omissions but one of them reads as follows:

“Pressurise the plaintiff into accepting the said voluntary redundancy package without allowing him sufficient opportunity to investigate the merits of same.”

Paragraph 14 makes an express allegation of deliberate concealment from the appellant of his potential entitlements and the paragraph further alleges that the representations made by the first-named respondent through its servants or agents to the appellant were made “with the intention of concealing these options from the plaintiff and deceiving him and did so deceive him.” There is no doubt that there is an allegation of deceit and, therefore, fraud in that paragraph. There is also an allegation of fraudulent concealment which might not of itself be a cause of action but presumably would be directed towards a potential plea of the Statute of Limitations.

Proposed amendments as against first-named respondent

That is the case made against the first-named respondent. It is now necessary to examine the proposed amendments to the Statement of Claim.

An amendment has been made to paragraph 8 which in so far as it concerns the first-named respondent is not very material. It seems to be merely an attempt to state more accurately what he was told he would receive if he took redundancy.

Paragraph 10 contains a significant amendment in that the effect of it would be to claim that the discovery of the alleged untruth of the representations was learnt in or around 1999 whereas in its original form the Statement of Claim did not give any date. It also strengthens the claim of misrepresentation in that it expressly alleges that the alleged untruths were known to be such by the first-named respondent at the time they were made. The date of discovery of the alleged untruth in so far as it is sought to be included in the Statement of Claim is not essential in that it is more importantly a matter to be included in the Reply. Nevertheless it is a clarifying amendment. I would also comment that the original Statement of Claim when read as a whole certainly insinuated that the first-named respondent knew the representations to be untrue. Further proposed amendments are in paragraph 11 but they are really only expansions of what is already alleged. There is a new and lengthy paragraph 12A in which it is alleged that the first-named respondent, its servants or agents acting in concert with the second-named respondent were guilty of fraud and/or fraudulent breach of trust and/or fraudulent misrepresentation and/or deceit and/or dishonesty and/or conspiracy. There are then detailed particulars of these allegations. Apart from the allegation of acting in concert with the second-named respondent there is nothing particularly new in the proposed paragraph 12A The same is true of the amendments to paragraph 13. Fundamentally, the same basic allegations of deliberate inducement to the appellant to take the redundancy terms and the deliberate concealment of his alleged entitlements are made. However, there is one change. Again, it is in connection with the bringing in of the second-named respondent. In the proposed amendment to paragraph 13 it is alleged that the first-named respondent wrongfully and dishonestly actively concealed from the appellant the whole scheme being set up by the first-named respondent with the consent and knowledge of the second-named respondent. This allegation of concert with and, indeed, conspiracy with the second-named respondent is also new.

With the exception of the conspiracy aspect, I am of opinion, for the reasons which I have been indicating, that the amendments proposed by the appellant in so far as they relate to the first-named respondent do not, in any sense, constitute a complete new case. They are really an expansion and arguably perhaps a strengthening of the claim that was made from the start. I will return to the legal implications of that in so far as the motion is concerned when I review the relevant law.

Existing pleadings as against second-named respondent

I now return to the Plenary Summons and the existing Statement of Claim for the purposes of a similar analysis of the claims being made against the second-named respondent. The existing Statement of Claim makes allegations against the second-named respondent which are quite different from those against the first-named respondent. It is necessary to go to paragraph 15 of the Statement of Claim to find any allegation against the second-named respondent. In that paragraph it is alleged that the second-named respondent as the sole trustee of the pension scheme was at all times material to the proceedings under a statutory duty to furnish to the appellant full and accurate information in relation to his entitlements under the pension scheme and further that he owed a fiduciary duty and/or a duty of care to the appellant to ensure that the appellant was aware of and understood the nature of his entitlements. The next paragraph, paragraph 16, then alleges that negligently and in breach of the statutory duty and in breach of the fiduciary duty and in breach of the duty of care the second-named respondent failed to disclose to the appellant any or any adequate information in relation to the pension entitlements. The entire claim, as it stands at the moment against the second-named respondent, is contained in those two paragraphs and it is perfectly clear that there is no allegation whatsoever of fraud, deceit or any kind of deliberate misconduct in either of those paragraphs. I would sum up the position this way. It would seem to me that from the beginning the Statement of Claim was alleging deliberate misbehaviour on the part of the first-named respondent but was merely alleging breaches of duty on the part of the second-named respondent. In both the Plenary Summons and the prayer in the Statement of Claim however the claims for deceit, fraud and/or fraudulent breach of trust and fraudulent misrepresentation are made against both respondents. As I have already observed that is irrelevant. No such case has actually been pleaded against the second-named respondent in the Statement of Claim.

Proposed amendments as against second-named respondent

I now turn to the proposed amendments. These proposed amendments, if allowed, would radically alter the case made against the second-named respondent. There is no doubt that under the proposed amended Statement of Claim serious allegations of fraud and deliberate misconduct are alleged against the second-named respondent which is a well known company carrying on the business of trustee of pension schemes. The allegations against the first-named respondent in the amended paragraph 8 are alleged in that paragraph against the second-named respondent also. The proposed amendment to paragraph 10 which expressly alleges knowledge of the untruth of the representations by both respondents. The allegation of wrongful concealment contained in paragraph 11 is likewise now by way of amendment made against both respondents. The whole of paragraph 12A being the new paragraph in the amended Statement of Claim is prefaced by the allegation that the first-named respondent, its servants or agents were at all material times acting in concert with the second-named respondent. In addition to claims of fraud, fraudulent breach of trust, fraudulent misrepresentation, deceit and dishonesty there is a claim of conspiracy which must necessarily involve both the respondents. Although paragraph 13 in its main body does not bring in the second-named respondent it does so in the particulars of wrongful and dishonest misconduct. In paragraph 16 it is expressly pleaded that the second-named respondent, its servants or agents were also guilty of fraud and/or fraudulent breach of trust and/or fraudulent misrepresentation and/or deceit and/or conspiracy and party and/or privy to dishonest concealment by the first-named respondent.

Consideration of these proposed drastic amendments as far as the second-named respondent is concerned must take into account certain matters which were contained in replies to notices for particulars arising out of the original Statement of Claim.

Possibly unwisely but presumably motivated by the contents of the general endorsement of claim on the Plenary Summons and the prayer in the Statement of Claim the following matter was raised at paragraph 10 of the first notice of particulars served by the second-named respondent arising out of the Statement of Claim. This read as follows:

“Arising from paragraph 14 of the Statement of Claim, please confirm that no allegation of deliberate concealment is made against IPT, its servants or agents.”

That elicited the following reply:

“No so confirmed. The plaintiff claims that the information was concealed from the plaintiff by the first-named respondent. The servants or agents of the first-named respondent were acting as servants or agents of the second-named respondent. The second-named respondent had actual or constructive notice that such information was being concealed by the first-named respondent from the plaintiff and failed to intervene. Please also see Statement of Claim, paragraphs 15 and 16.”

Understandably, the solicitors for the second-named respondent raised the matter again in a notice for further and better particulars. They wrote the following:
“10. Arising from the reply given,

(i) Please give full and detailed particulars of the allegation that IPT had actual notice that information was being concealed from the plaintiff by the first respondent and set out the material facts (but not the evidence thereof) on which the plaintiff relies in alleging that IPT had such notice.

(ii) Please give full and detailed particulars of the allegation that IPT had constructive notice that information was being concealed from the plaintiff by the first respondent and set out the material facts (but not the evidence thereof) on which the plaintiff relies in alleging that IPT had such notice.

(iii) Please give full and detailed particulars of IPT’s alleged ‘failure to intervene’”.

In the reply to that further notice for particulars a hopelessly unsatisfactory answer was given by the solicitors for the appellant. It reads as follows:

“10 (i) This is not an appropriate matter for particulars. This is a matter for evidence of the hearing of the action.

(ii) This is not an appropriate matter for particulars. This is a matter for evidence of the hearing of the action.

(iii) This is not an appropriate matter for particulars. This is a matter for evidence of the hearing of the action”.

In my opinion, the second-named respondent was perfectly entitled to be told the basic facts on which the allegation of deliberate misconduct was being based. I draw the inference and I believe that I am entitled to draw the inference from this correspondence that in so far as there was an allegation made of deliberate concealment against the second-named respondent (which it must be remembered was really only made in a reply to a notice for particulars and not in the Statement of Claim) it was nothing more than a piece of legalistic pleading. It is not alleged that there was any representation made by an employee of the second-named respondent. All that background, in my opinion, is highly relevant when considering the application to amend the Statement of Claim in so far as it concerns the second-named respondent.

The law
Although there is a body of case law which has been helpfully referred to in the written submissions of the three parties, the most important legal source is the relevant rule in the Rules of the Superior Courts in that in many respects its terms are crystal clear. The relevant rule is Rule 1 of O. 28 and it reads as follows:

“The Court may, at any stage of the proceedings, allow either party to alter or amend his endorsement or pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties.”

While undoubtedly there is a discretion in the court as to whether to make the order or not and other factors may come into play, the primary consideration of the court must be whether the amendments are necessary for the purpose of determining the real questions of controversy in the litigation. I am in agreement with the submissions of counsel for the appellant that the learned High Court judge did not adequately address that question but was much more concerned with the procedural conduct of the appellant. The priority which must be given to that issue was clearly restated by the Supreme Court in O’Leary v. Minister for Transport, Energy and Communications [2001] 1ILRM 132. McGuinness J. sat with Denham and Barron JJ. The following passage at p. 143 of the report clearly indicates the approach of McGuinness J. and of the court.

“I accept that there has been undesirable delay in the prosecution of these proceedings. As Mr. Gallagher submitted, the action was instituted very late in the day, and having been instituted late, has been progressed by the applicant at an extremely relaxed pace. Indeed the amount of delay, and the repeated delay is the strongest argument against permitting the inclusion of a new and distinct claim of conspiracy. However this is an application under Order 28 Rule 1, and the delays in the instant case are not outside the well established parameters of that rule. The operation of the rule was considered by the learned Kinlen J. in Bell v. Pederson [1995] 3 IR 511; [1996] 1 ILRM 290. In that case an application to amend the pleadings in a substantial and important way was made on the morning of the trial. The learned Kinlen J. allowed the respondents to amend their defence in the manner sought. In his judgment he approved the principles laid down by Keane J. in Krops v. The Irish Forestry Board Limited and referred also to the dicta of Lynch J. in Director of Public Prosecutions v. Corbett ILRM 674 at p. 678:
‘The day is long past when justice could be defeated by mere technicalities which did not materially prejudice the other party. While courts have a discretion as to amendment that discretion must be exercised judicially and where an amendment can be made without prejudice to the other party and thus enable the real issues to be tried the amendments should be made. If there might be prejudice which could be overcome by an adjournment then the amendments should be made and an adjournment also granted to overcome the possible prejudice and if the amendments might put the other party to extra expense that can be regulated by a suitable order as to costs or by the imposition of a condition that the amending party shall indemnity the other party against such expenses.’
Kinlen J. adopted this reasoning as part of the ratio of his judgment. It appears to me also to be an application of principle which is in accordance with justice.”

Even if I was not bound to do so, I would have no hesitation in following that judgment. I entirely agree with the approach to the interpretation of the rule which it represents.

In some of the High Court decisions cited in the submissions, there has been an overemphasis on an obligation to give good reason for having to amend the pleadings. To a large extent these decisions seem to derive directly or indirectly from an unreported judgment of Barron J. delivered in the High Court on the 21st December, 1992 in the case of Shepperton Investment Company Limited v. Concast [1975] Limited. The material passage in the judgment reads as follows:

“Ultimately however the question is, where does the balance of justice lie. Clearly, if the plaintiff has a good case in respect of its amended claim, it is facing a serious injustice if it is not allowed to make it. Nevertheless before such an amendment should be allowed full disclosure should be made as to the circumstances in which the claim comes to be made and as to why it has not been made sooner. No such effort has been made here in circumstances where the technical evidence apparently available to the plaintiff appears not to support the amendment. Such considerations weaken the case for the plaintiff.”

This passage must be read in the context of views expressed by the learned judge earlier in his judgment. The reference to “full disclosure” “as to the circumstances in which the claim comes to be made” would appear to me to be a reference to the fact heavily criticised in the judgment that the plaintiff had not given proper particulars in replies to a notice for particulars and in particular had relied on the answer “this is a matter of evidence”. Of course, this aspect of the judgment is relevant to the claim to amend the Statement of Claim as against the second-named respondent which I will be dealing with in due course.

What has also influenced the High Court is the decision of this court in McFadden v. Dundalk and Dowdallshill Coursing Club Limited (unreported judgment of Finlay C.J. 22nd April, 1994) in which the court upheld the judgment of the High Court (Johnson J.) in refusing an amendment by the respondents of a defence to plead that the plaintiff was a member of the Club on an application made some three days before the intended date of trial on the basis that no information was given in the affidavit as to why the matter had not been adverted to before that point in time and why the application had not been brought at an earlier point in time. The McFadden judgment was delivered ex tempore as a ruling of the court. The proceedings had been commenced by a summons in December, 1990 and were brought forward for trial. The case came on for trial in Dundalk, was listed and ready for hearing in a session prior to December, 1993 but though intended to be taken up by reason of the amount of work on that day the case fell out of the list and was adjourned to be tried in the December session. At that stage the position of the case in the list in Dundalk was going to give it a secure chance of getting a hearing. The December sittings in Dundalk commenced on the 9th December and an application was made to the High Court on the 6th December by the respondents to amend their defence to raise the plea that the plaintiff was a member of the Club and that, therefore, he could not sue as a member of an unincorporated body. This is what Finlay C.J. had to say:
“This is a preliminary point which the court is quite satisfied is a purely technical point particularly on the facts of this case. At least it is quite clearly without any merits though it may be a good legal point. The court does not express any views about that. The question then is whether the court should exercise a discretion to permit the respondents to amend their defence. To raise a purely technical point at this stage, the learned trial judge of the High Court decided that it was too late. This court is of the same view. No explanation was given on any affidavit as to why the matter was not adverted to or why it was not in the original defence or why there was not any application made before the time when it was.”

It is clear from that passage and from later parts of the ex tempore ruling that the court was understandably taking the view that having regard to the late state at which the proceedings were at and its listing history it would on the face of it be quite wrong to permit the amendment. But as I interpret the judgment, the references to an affidavit and to reasons was a reference to the obvious fact that there could be exceptional reasons for allowing an amendment even at that late stage in which case those exceptional reasons would have to be fully set out in evidence before the court and that was not done. I do not think that McFadden can be cited as an authority for any general principle as to what the contents of an affidavit have to be in an application to be allowed deliver an amended pleading.

Shepperton and McFadden were both cited by and relied on by Flood J. in Palamos Properties Limited v. Brooks [1996] 3 IR 597. With reference to the two cases Flood J. said the following at p. 605:

“In my opinion these decisions amount to this. That within the facts underlying the claim before the courts there must be such evidence from which an inference can reasonably be drawn as to why the plea which is sought to be introduced by way of amendment was not put in the original defence or express evidence given to explain the failure in a manner which renders the omission broadly excusable if not actually justifiable.”

For the kind of reasons which I have indicated, I would express doubt that those cases support such a broad proposition as enunciated by Flood J. Both cases were special to their own peculiar facts. There are, however, some other pertinent and useful quotations from English cases in the judgment of Flood J. He first cites the well known case of Cropper v. Smyth (1884) 26 Ch. D. 700 at pp. 710-711 where Bowen L.J. said the following:

“It is a well established principle that the object of the courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights… I know of no kind of error or mistake, which if not fraudulent or intended to overreach, the court ought not to correct, if it can be done without injustice to the other parties. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace …It seems to me that as soon as it appears that the way in which the party has framed his case will not lead to a decision on the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right.”

Flood J. also cites Woolf L.J. in Bower v. Maxwell (unreported judgment Court of Appeal England 8th May, 1989):

“The mere fact that where delay has been occasioned by a party who seeks to obtain leave to amend his pleadings to introduce new issues, that that delay may be capable of being compensated in money is not conclusive of the question whether the amendment should or should not be permitted. The respondent’s conduct … must be such that it can be regarded as justifiable or at any rate excusable.

If the respondent’s is not justifiable or excusable then that factor has to be taken into consideration as part of the matters to be weighed in deciding whether or not it will allow the amendment and of course where the result of taking it into consideration is countered by the factor that they would be prejudiced to the plaintiff by allowing the amendment, the amendment should not be allowed.”

Questions as to how O. 28, r. 1 is to be interpreted also came before Kinlen J. in Bell v. Pederson [1995] 3 IR 511. In that case the learned judge referred to McFadden, Palamos and DPP v. Corbett already cited. It is not entirely clear what exact principle the learned judge drew from these cases but he does seem to have quite correctly addressed the question of prejudice to the plaintiff in circumstances where the respondent was seeking to amend his defence in a libel action by pleading express malice. In deciding what he should do Kinlen J. clearly had regard to the question of why the plea was not originally in the defence and he was satisfied that this could be traced to the failure of the respondent’s solicitor to provide counsel with the second page of the alleged defamatory letter. He came to the conclusion that the amendment should be granted in that prejudice could be met by appropriate costs order.

An important High Court decision is Krops v. The Irish Forestry Board Limited [1995] 2 IR 113 where Keane J. (as he then was) carefully considered the ambit of O. 28, r. 1 and held that the court has a wide jurisdiction to amend pleadings in such manner and on such terms as it considers just in the circumstances. He went on to hold that as a matter of principle, pleadings carry with them from the time they are issued or delivered the potentiality of being amended by the court and that since the proceedings were always capable of amendment by the court in such manner as might be just and in order to allow the real question and controversy between the parties to be determined. The mere fact that if a new cause of action sought to be included in the Statement of Claim had been brought by separate action it would be statute barred does not prevent the amendment being granted. This decision has particular relevance to the objection to the inclusion of “1999” in the proposed amended Statement of Claim. But if that really is the year when the plaintiff acquired the knowledge it is prima facie a necessary amendment for having the real issues tried or certainly, it would have to be included in a Reply. The insertion of date of knowledge is merely an expansion of the claim being made at any rate.

 

 

Conclusion on application to amend Statement of Claim

Having outlined the nature of the claims against each respondent as pleaded in the existing Statement of Claim and having reviewed the case law relating to this kind of application, I turn now to the conclusions which I have arrived at. But before setting out what those conclusions are I think it important to refer to certain aspects of the judgment of the High Court. Although the learned High Court judge undoubtedly accepted all or certainly most of the submissions put forward on behalf of each of the respondents in this court and which had equally been put forward before him in the High Court, it is clear nevertheless from the whole tenor of his judgment that he was particularly strongly influenced by what he perceived as procedural misbehaviour on the part of the appellant. For the most part, I would be in full agreement with his strictures in this regard. Notwithstanding that the appellant brought his own motion for directions, at no stage was it apparently intimated to Smyth J. that following on the directions or following on discovery there would probably be an application to amend the Statement of Claim and an application to deliver late Replies. At p. 9 of the transcript of his judgment, the learned High Court judge had this to say:

“At the hearing of the motion for directions, the application of the plaintiff was that five to ten cases should proceed to a full and final hearing as test cases. If there was any intention to amend the pleadings in those cases (of which Mr. Croke was one), then clearly such were not ready for hearing and this fact (if it were so at the time, i.e. 25th June 2003) should have been disclosed to the court as it was, if it was a material fact and of potential relevance to the consideration by the court on the motion for directions which were then before it.”

I agree with that statement and I also agree with the learned High Court judge’s rejection of the excuse put forward that it was appropriate to bring the application for directions ahead of any application to amend the Statement of Claim or deliver a late Reply. The learned High Court judge went a step further and declared himself satisfied and found as a fact on the evidence before him “that notwithstanding the plaintiff having the defence of IPT (on the 25th May, 2002) and Waterford (on the 8th January, 2003) expressly pleading the provisions of the Statute of Limitations, 1957 that the plaintiffs had no intention that can be objectively determined to amend the pleadings until after the order of the High Court on the 26th June, 2003.” That, of course, was the order making the directions. It does seem to me that there was a certain element of disingenuousness on the part of the appellants. There is a danger, however, that in overly concentrating on these discrepancies in the procedural behaviour of the appellants the real purpose of the rule may become forgotten. While I quite agree that other factors have to be taken into account in the exercise of the discretion, the primary purpose of the rule is to give the court wide powers of amendment so that the real issues between the parties can be determined. This is always subject to questions of real prejudice to the respondent but some aspects of prejudice can be dealt with by appropriate costs orders or conditions. Inserting the date of knowledge into the Statement of Claim is a helpful piece of clarification but contrary to what the learned High Court judge seemed to imply it is not necessary for the purposes of meeting a plea of the Statute of Limitations. As I have already pointed out, it is in the Reply that the date of knowledge must be inserted. If there is any legitimacy in the trial judge’s strictures in relation to this part of the amendments i.e. the amendment inserting the date of knowledge, they are more appropriate to the application for liberty to deliver a late Reply than to the application to amend the Statement of Claim.

I do not think it would be right for a court on an interlocutory application such as this to speculate in any way as to whether a date of knowledge proposed to be inserted is in some way bogus or not. As will emerge I take the view that the order permitting late delivery of the Reply to the first-named respondent’s defence ought to be granted and as the date of knowledge is inserted in it, it would seem sensible that it be inserted in the amended Statement of Claim at least if some of the other amendments are approved by this court.

These other amendments essentially relate to allegations of fraud and deliberate misconduct. While these causes of action involving deliberate misconduct such as fraud, deceit etc. were not properly pleaded in the original Statement of Claim such allegations, in my view, are implicit in the existing Statement of Claim for the reasons which I have already indicated and I, therefore, think it is appropriate that they be properly pleaded and made explicit. Interestingly, the learned High Court judge at p. 11 of the transcript of his judgment that a submission had been made to him in the High Court on the 25th June, 2003 that “in the present case, the plaintiffs have fully pleaded the fraud and have given particulars of the fraud.”

The reference to “particulars of the fraud” is also interesting. Paragraph 13 of the first-named respondent’s notice for particulars dated 16th July, 2002 is in the following terms:

“The plaintiff claims damages for deceit, fraud and/or fraudulent breach of trust and/or fraudulent misrepresentation. Please give full and detailed particulars of the matters relied on by the plaintiff to support the said allegations.”

The solicitors for the appellant in a letter dated 8th August, 2002 replied to

that particular as follows:

“See paragraph 12 of the Statement of Claim. Moreover the plaintiff claims that the second-named respondent knew and was aware and/or ought to have been aware that the first-named respondent was operating a voluntary redundancy scheme in which pension funds were being paid out. Such pension refunds were being paid out without the plaintiff being properly informed and/or advised either by the first-named respondent or the second-named respondent as to his proper rights and entitlements. In so far as the second-named respondent did not inform the plaintiff of his rights as the second-named respondent was under a fiduciary and statutory duty to do, the second-named respondent in effect failed in its legal obligation to provide information to the plaintiff. The second-named respondent was also aware or ought to have been aware of the misrepresentation made by the first-named respondent to the plaintiff. The first-named respondent represented to the plaintiff that he had no pension entitlements or alternatively he did not represent to the plaintiff that he had pension entitlements. In so doing the first-named respondent was acting in circumstances where they were acting as servants or agents of the second-named respondent”.

It seems clear that however badly it was pleaded, a fraud claim of some sort against the first-named respondent was at all material times in the mind of the appellant. I believe that the position relating to the second-named respondent is quite different and I will come to it in due course.

It is not clear to me that the amendments as against the first-named respondent would give rise to any relevant legal prejudice. If by reason of the appellant’s date of knowledge the action which might otherwise have been statute barred is not in fact statute barred it cannot be said that prejudice has arisen. It is not necessary for this purpose to apply the principles adopted by Keane J. in Krops v. The Irish Forestry Board cited above.

The learned High Court judge, although carefully dealing with all aspects of the case, did not place sufficient emphasis on the basic purpose of the rule which is intended to be a liberal rule. I am, therefore, of the view that as against the first-named respondent the appellant ought to be allowed deliver an amended Statement of Claim. I will return to the question of the form that that amended Statement of Claim should take.

In so far as the appellant wants to amend the Statement of Claim as against the second-named respondent I take a different view. In the earlier part of this judgment, I have demonstrated by reference to the pleadings in the existing Statement of Claim and by reference to the replies to the two notices for particulars sent by that respondent that the appellant has not put forward any factual basis whatsoever to support a fraud or any kind of deliberate misconduct claim against the second-named respondent. In the replies to particulars there is a vague allegation that deliberate misrepresentations made by the first-named respondent were made by that respondent as agent for the second-named respondent. But there are no particulars even remotely supporting that proposition. There are no allegations against any single named employee of the second-named respondent and, of course, having regard to the nature of the second-named respondent company fraud or conspiracy allegations against it would be particularly serious.

What are the real issues between the parties? At best from the appellant’s point of view there are both positive and negative issues as against the first-named respondent, that is to say, issues of fraud and breach of duty but as against the second-named respondent no factual basis has been given to support any allegation against it other than the negative one of breach of duty. Accordingly, I would refuse leave to amend the Statement of Claim as against the second-named respondent.

It logically follows that I would not grant leave to deliver the amended Statement of Claim in its present form because that includes claims of fraud and conspiracy and other deliberate misconduct against the second-named respondent. I would take the view that before the court can make a final order permitting the delivery of an amended Statement of Claim as against the first-named respondent it will have to have sight of the re-amended draft. It would be wholly wrong for the court to attempt its own amendments. It is for the appellant to plead his case. Therefore, when I say that I would grant leave for delivery of an amended Statement of Claim as against the first-named respondent, I mean an amended Statement of Claim suitably re-amended and approved by the court so as to exclude the amended claims against the second-named respondent.

Conclusions on application for leave to deliver late Reply to each of the defences

If there is an answer to a plea of the Statute of Limitations that answer must be pleaded in a Reply. While it is true that there are time limits for the delivery of a Reply there would have to be extraordinary circumstances in my view for a court to deprive a plaintiff of the right to adduce a perfectly good answer to a plea of the Statute of Limitations effectively on a time point. On that ground alone I would have no difficulty in the court permitting the plaintiff to deliver Replies to the defences of both respondents. I see no objection to including the other matters which do not relate to statute bar. The mechanics of the order would have to differ in relation to each Reply. It would seem to me that the court may straight away set aside the refusal order of the High Court and permit the delivery of a Reply to the Defence of the second-named respondent since in relation to that action I have taken the view that leave should not be given to amend the Statement of Claim as against that respondent. However, it would be pointless at this stage to give leave for the delivery of a Reply to the Defence of the first-named respondent if the court is giving leave to amend the Statement of Claim against that respondent. Obviously, it would be part and parcel of that order that the first-named respondent would have liberty to deliver an amended Defence to that amended Statement of Claim and the proper order for the court to make would be to give liberty to the appellant to deliver a Reply to the amended Defence of the first-named respondent within an appropriate period. The order could provide that in the unlikely event that there would be no amended Defence the appellant would have leave to deliver a Reply to the existing Defence. It is important that the delivery of these amended and additional pleadings be expedited because, apart from anything else, this court has still to hear and determine the appeal from the High Court order for directions.

In summary, I would allow the appeal of the appellant against the first-named respondent in both motions subject to the re-amending of the amended Statement of Claim as indicated. I would dismiss the appeal of the appellant against the second-named respondent on the motion seeking liberty to amend the Statement of Claim in so far as it would contain additional allegations against the second-named respondent but I would allow the appeal on the motion seeking liberty to deliver a Reply to the defence of the second-named respondent. The Reply permitted to be delivered as against the first-named respondent would be a Reply to an amended Defence following on delivery of an amended Statement of Claim.

Smyth v Tunney

[2009] IESC 5

Judgment of Mr Justice Finnegan delivered on the 23rd day of January 2009

 

The respondent issued a plenary summons against the appellants on the 26th March 1996. In the endorsement of claim he sought damages for defamation, injurious falsehood and negligent misstatement. There was delay in service of the plenary summons and a statement of claim was not delivered until the 10th September 1998. The reliefs claimed in the statement of claim are damages for malicious and/or injurious falsehood, defamation and conspiracy. By notice of discontinuance dated the 11th August 1998 the action was discontinued against the third named appellant. Pursuant to an order of the court an amended statement of claim was delivered on the 26th March 2001. The relevant facts are set out in paragraphs 4, 5 and 8 of the amended statement of claim as follows:-
4. In or about the period between 29th June 1992 and 26th October 1992 and thereafter until and about May 1995 a series of phone calls of a malicious and defamatory nature were made on behalf or at the behest of or with the knowledge and acquiescence of the first named defendant from phone lines and telephone apparatus in Classiebawn Castle, Mullaghmore, Co. Sligo, i.e. from the phone numbers 071-66455, 071-66491 and 071-66326 which telephone lines were listed in the names of Tunney Meats Limited and/or Hugh Tunney as subscriber. Phone calls of a similar nature were made from phone lines and telephonic apparatus in the Gresham Hotel, Dublin, i.e. from phone lines now with the number 01-8748145, which telephone lines were listed in the name of Hugh Tunney c/o The Gresham Hotel. The said phone calls were made to the same parties as the aforementioned phone calls.
5. In these phone calls a female caller had claimed that Sherry, a criminal associate of a convicted drugs trafficker and with excellent sources within the Garda, was part of a money laundering operation on behalf of the I.R.A. and that monies were cleansed through an Irish company called Princeton Limited. It was alleged that a co-director of Princeton Limited was Chief Superintendent Paul Smyth of the Garda (being the plaintiff herein). It is alleged that Chief Superintendent Smyth had actively inhibited any enquires about Sherry and associates, allegedly by misuse of his authority whilst head of personnel by transferring ‘troublesome’ officers. The phone calls in question were made to the South East Regional Crime Squad of the British Police Forces at (inter alia) New Southgate branch office, 143 High Road, London N1 1PM (phone number 181-3685100) and were received by Detective Inspector Stephen Condon and Detective Constable Paul Edwards.
8. The allegations made in these phone calls were notified to An Garda Siochána by the British Police Forces concerned which led to an investigation by An Garda Siochána to the prejudice, damage and detriment of the plaintiff.”

On the 11th February 2003 the respondent issued a motion seeking the following reliefs:-
“1. An order granting the plaintiff liberty to withdraw the notice of discontinuance of the 11th August 1998 as against the third named defendant and liberty to proceed within proceedings as against the third named defendant.
2. An order grant the plaintiff liberty to deliver an amended statement of claim in the form attached hereto.”

The motion was grounded on an affidavit of the plaintiff. Therein he deposes that a defence had been delivered by the first named defendant but no defence had been delivered by the second named defendant. He deposes as to the reason for the discontinuance of the action against the third named defendant as follows:-
“The reason for the discontinuance is that the calls were made by the said Ms Devine either on her own behalf or on behalf of Mr Tunney and while she may also have made them on behalf of Crofter Properties Limited it seemed unnecessary at that time to involve Crofter Properties Limited in order to vindicate my reputation. Proving that Ms Devine acted on behalf of Crofter Properties Limited seemed a burden which I need not take on with any associated risk of costs.”

On the 9th July 2002 the Supreme Court in a decision in an action Crofter Properties Limited v Genport Limited held that Ms Devine, made the calls not only on her own behalf but also on behalf of Crofter Properties Limited.

Consequent on the withdrawal of the notice of discontinuance the statement of claim would require amendment. However in addition the respondent sought to amend his claim by including claims arising from similar type telephone calls made to the Revenue Commissioners and Phoenix Magazine. The respondent became aware of these telephone calls as a result of discovery made in the action Crofter Properties Limited v Genport Limited. No leave was sought at any time to avail of this discovery for the purposes of the present proceedings.

By order of 29th January 2004 the High Court (O’Sullivan J.) gave the plaintiff liberty to withdraw the notice of discontinuance and liberty to deliver an amended statement of claim as sought and against that order the appellants now appeal.

 

Withdrawal of the Notice of Appeal

The respondent in the High Court relied on two Canadian cases Adam v Insurance Corporation of British Columbia [1985] 66 B.C.L.R. 164 and Pacific Centre Limited v Microbase Development Corporation, unreported,19th September 1990, Hynes J. In this court reliance was placed on the former. In that case the plaintiff instituted proceedings seeking damages for personal injuries sustained when a bus in which he was travelling was in collision with a car against both the bus driver and the owner and operator of the bus company and the unidentified owner and driver of the car. Shortly before the trial date the action against the Insurance Corporation of British Columbia was discontinued as the plaintiff’s counsel believed that the action was barred by the combined effect of the Insurance (Motor Vehicle) Act and Regulations relating to the Workers Compensation Board. . Her counsel later learned of an unreported decision which indicated that the relevant Regulation might have been ultra vires and as a result sought and obtained an order setting aside the discontinuance. At that time the plaintiff’s action was statute barred. The defendant appealed against the order setting aside the discontinuance. The issue in the action was whether the court had a discretionary power to set aside the notice of discontinuance and if so whether that discretion had been properly exercised. The British Columbia Court of Appeal held that it had power to set aside the notice of discontinuance but that it should not have been done in that case. The relevant rules of court contained no provision for setting aside a notice of discontinuance. In the course of his judgment Esson J.A. referred to four Canadian cases. In three of those cases the defendant had intended to counterclaim but had not launched a counterclaim before the plaintiff discontinued and it was held that the defendant had been prejudiced in that it was not then in a position to assert the right which it had wished to put forward by way of counterclaim. In each of those cases it was held that there was no power to set aside a notice of discontinuance. However in Cusack v Garden City Press Limited [1978] 22 O.R. (2d) 126 (S.C.) the plaintiff applied to set aside a notice of discontinuance. The matter was heard before a Master. In the course of his judgment he said:-
“I feel that it must always be open to the court in proper circumstances to relieve against an act done either by way of inadvertence or misapprehension and that this should be particularly so where no real prejudice to the other side is demonstrated.”

The circumstances in the case were as follows. The plaintiff sought an interlocutory injunction and failed. His lawyer then filed a notice of discontinuance. The plaintiff retained other lawyers and from that point on the notice of discontinuance was disregarded and the matter was fully pleaded. The defendant then took the position that the action was not properly constituted because of the notice of discontinuance. The plaintiff swore that he had not authorised his lawyer to take any step by way of discontinuance.

Esson J.A. categorised the Cusack case as one in which the discontinuance was not the act of the plaintiff but also one in which there were clearly acts on the part of the defendant taken with knowledge that there had been a discontinuance which would amount to a waiver of any rights. This distinguished the case from that before him. In Cusack the word “misapprehension” must have been intended to refer to misapprehension by the plaintiff’s original lawyer as to his instructions. In the case before him there was no misapprehension and no mistake and no inadvertence but rather a considered decision by the plaintiff to terminate the action. He went on to hold that the court must have an inherent jurisdiction over its own process and there must be a discretionary power to relief against the consequences of discontinuance without attempting to catalogue the circumstances which would justify the exercise of that power. He held that the circumstances must be very special and may not go beyond the kind of inadvertence, mistake or misapprehension which existed in the Cusack case. Further in the case before him the limitation period had expired after the discontinuance and the effect of setting aside the notice would be to give a cause of action which would otherwise be clearly statute barred. He allowed the appeal.

O’Sullvian J. accepted that the Statute of Limitations having regard to the nature of the torts relied upon might not in this case have run against the respondent.

This decision does not appear to me to advance the respondents case. There was no question of inadvertence or mistake but rather a deliberate decision not to proceed against the third named defendant with a view to minimising the risk as to costs. The present case falls outside the very limited sphere in which the inherent jurisdiction envisaged by Esson J.A. would operate.

The learned High Court judge was not referred to any authorities other than the Canadian authorities which I mention. This is not an area devoid of authority. Order 26 Rule 1 of the Rules of the Supreme Court in England and Wales was identical to Order 26, Rule 1, in the Rules of the Supreme Court (Ireland) 1905. Order 26, Rule 1, was repeated in the Rules of the Superior Courts 1962 and again repeated in the Rules of the Superior Courts 1986 with an amendment not relevant here relating to discontinuance on consent. Excluding that amendment Rules of the Superior Courts 1986 provide as follows:-

“The plaintiff, may at any time before receipt of the defendants defence, or after the receipt thereof before taking any other proceeding in the action (save any interlocutory application), by notice in writing in the Form No. 20 in Appendix C wholly discontinue his action against all or any of the defendants or withdraw any part or parts of his alleged cause of complaint, and thereupon he shall pay such defendant’s costs of the action, or, if the action be not wholly discontinued, the costs occasioned by the matters so withdrawn. Such costs shall be taxed. (The plaintiff may, however, at any time prior to the setting down of any cause for trial wholly discontinue his action, with or without the costs to be paid by any party, upon producing to the proper officer a consent in writing signed by all parties or by their solicitors and such costs (if any) shall be taxed). Such discontinuance or withdrawal as the case may be shall not be a defence to any subsequent action.”

In England and Wales the Rules remained identical with some amendments not material to this case up to the introduction of the Civil Procedure Rules in 1998. Accordingly decisions of the Courts in England and Wales while not binding are persuasive.

A starting point as to the law in this jurisdiction is Wylie on the Judicature Acts. At page 437 he states that Order 26, Rule 1, forms a complete code as to the discontinuance of an action or the withdrawal of a defence or counterclaim and cites as authority Fox v Star Newspaper Company [1898] 1 Q.B. 639 a judgment of the Court of Appeal. That judgment was upheld by the House of Lords reported at (1900) A.C. 19. The rule in issue in that case is identical to that in the 1905 Rules. Chitty L.J. in the Court of Appeal said:-

“It seems to me that order XXVI is intended to form a complete code applicable to the whole subject of discontinuing an action.”

This view of Order 26, Rule 1, persisted in England and Wales – service of a notice of continuance put an end to the action but without prejudice to the right of the plaintiff to institute fresh proceedings on the same grounds but subject to an exception where service of a notice of discontinuance was an abuse of the court’s process when the discontinuance could be set aside on application by the other party to the cause.

In Castanho v Browne and Root (U.K.) Limited [1981] A.C. 557 the facts were as follows. The plaintiff, a Portuguese, resident in Portugal, sustained injuries in an accident when employed by the second defendant, a Panamanian company, on an American ship lying in an English port. Proceedings were instituted in England seeking damages for the injuries. On consent two interim payments were made to the plaintiff and a defence delivered admitting liability. The plaintiff then commenced an action in Texas and discontinued the English action. The American proceedings if successful would result in a greatly enhanced award by way of general damages and punitive or exemplary damages. In the High Court Parker J. held that the notice of discontinuance was in these circumstances an abuse of the process of the court and struck out the notice of discontinuance and injuncted further prosecution of the proceedings in Texas. The Court of Appeal by a majority (Shaw and Brandon L.JJ., Denning M.R. dissenting) allowed an appeal against both orders. In the High Court Parker J. and in the Court of Appeal Denning M.R. in his dissenting judgment held that it is possible to treat a notice of discontinuance which complies with the Rules of Court as an abuse of process and that the court has jurisdiction to strike it out. The House of Lords agreed. The House of Lords thus established an exception to the general rule that Order 26, Rule 1, was a complete code and that as the rule did not provide for the striking out of a notice of discontinuance the court had no power to do so.

In Ernest and Young v Butte Mining Plc [1996] 1 All E.R. 623 Robert Walker J. said:-

“Discontinuance is the process by which a plaintiff (or plaintiff by counterclaim) may put an end to the whole of his claim and the proceedings in question. It has featured in the Rules of the Supreme Court for well over a century, having superseded all the procedures such as non-suit or voluntary dismissal of a bill in chancery (see Fox v Star Newspaper Company Limited [1900] A.C. 19)…a plaintiff’s apparently unfettered right to discontinue before or within fourteen days after the defence is, however, subject to the overriding rule that discontinuance will not be permitted if it is an abuse of process.”

The issue in Ernst & Young was whether or not in the particular circumstances the discontinuance was an abuse of process. The defendant had intimated an intention to counterclaim. There were discussions between the plaintiff’s and the defendant’s solicitors. Both solicitors were aware that if the action should be discontinued prior to the service of the counterclaim the counterclaim would not survive there being no action in existence at the date of service. The plaintiff’s solicitor agreed to discuss the terms upon which the action should continue, that is the counterclaim, after the discontinuance while all times her intention was to discontinue and rely on the discontinuance to defeat the intended counterclaim as at the time of discontinuance the statute would have run against the defendant and the plaintiff would have had a defence on the basis of the statute against any proceedings subsequently instituted by the defendant. In holding that the service of the notice of discontinuance in these circumstances was an abuse of process Robert Walker J. said:-

“Heavy, hostile commercial litigation is a serious business. It is not a form of indoor sport and litigation solicitors do not owe each other duties to be friendly (so far as that goes beyond politeness) or to be chivalrous or sportsmanlike (so far as that goes beyond being fair). Nevertheless, even in the most hostile litigation (indeed, especially in the most hostile litigation) solicitors must be scrupulously fair and not take unfair advantage of obvious mistakes: see the decision of the Court of Appeal in Darby and Co. Limited v Weldon (No. 8) [1990] 3 All. E.R. 762 (this was not cited by counsel but the general principle is, I think, uncontroversial). The duty not to take unfair advantage of an obvious mistake is intensified if the solicitor in question has been a major contributing cause of the mistake.”

While the issue was determined on the basis of abuse of process the circumstances come closer to those in which equity would grant relief, that is, fraud, accident or mistake,. However, no case has been cited in this or in neighbouring jurisdiction where a notice of discontinuance has been struck out on such a basis. Abuse of process is narrower in scope than the equitable principles in that it concerns the inherent power of the court to prevent misuse of its procedure in a way which although not inconsistent with the literal application of its procedural rules would nevertheless be manifestly unfair to a party to the litigation or would otherwise bring the administration of justice into disrepute.

Gilham v Browning & Another [1998] 2 All ER 68 also concerned the striking out of a notice of discontinuance for abuse of process. In the course of his judgment May L.J. said:-

“It is, of course, important to recognise on the one hand that the court uses a jurisdiction to strike out for abuse sparingly and in plain cases where there has been misuse of the court’s process, and on the other that the court is not constrained by fixed categories of circumstances in which the court has this power.”

There are many other cases reported to like effect: see Hunter v Chief Constable of West Midlands [1981] 3 All ER 727 at 729 and Fakih Bros v A.P. Moller (Copenhagen) Limited [1994] 1 Lloyd’s Rep. 103. The cases consistently recognise that the rule does not provide for the withdrawal of a Notice of Discontinuance by the party who has served the same. The court has not been referred to any case in this jurisdiction or in England and Wales where this has been permitted. There is no report of such case in either jurisdiction recognising an inherent jurisdiction to do so. Even if such jurisdiction should exist this is not a case in which it should be exercised. The decision to serve the notice of discontinuance was a conscious and advised one. The withdrawal of the notice of discontinuance at this stage would likely deprive the third named appellant of a defence of the Statute of Limitations.

Having regard to the foregoing I would allow the appeal and set aside the order of the High Court which gave leave to the respondent to withdraw the notice of discontinuance.

Amendment of Statement of Claim

Exhibited on the application was an amended form of statement of claim. Many of the amendments are in anticipation of the third named appellant being re-joined in the action as a result of withdrawal of the notice of discontinuance. Clearly these are no longer relevant. In addition however the respondent seeks to rely on the

additional publication to Phoenix magazine and the Revenue Commissioners and it is necessary to consider whether these amendments should be permitted. In short the respondent seeks to plead new facts and on foot of these to recover damages on the basis of the original causes of action pleaded. In addition the respondent seeks to add additional causes of action namely:

(i) wrongful interference with economic interests of the plaintiff;

(ii) negligence and breach of duty.

The application is made pursuant to Order 28 Rule 1 of the Rules of the Superior Courts which provides as follows:-
“The court may at any stage of the proceedings allow either party to alter or amend his endorsement or pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties.”

Order 28, Rule 1, was considered by the High Court in Krops v Irish Forestry Board Limited [1995] 2 I.R. 113. The plaintiff’s wife was killed in an accident when the car in which she was travelling was struck by a falling tree. Proceedings were instituted claiming damages arising out of her death, which it was pleaded, was caused by the negligence, breach of duty and breach of statutory duty of the defendants. The plaintiff sought leave to amend the statement of claim by the insertion of the words “and nuisance”. Keane J. (as he then was) considered the law in England and Wales under the Rules of the Supreme Court 1965 Order 20 Rule 5 and went on to consider whether as a matter of principle the same approach should be adopted in this jurisdiction. Since Weldon v Neal [1887] 19 Q.B.D. 394 both in England and Wales and in this jurisdiction an amendment would not be permitted if it would deprive the defendant of a defence under the Statute of Limitations. However in England and Wales in Chatsworth Investment Limited v Cussins (Contractors) Limited [1969] W.L.R. on considering the new rule of court held that Weldon v Neal should not be applied in its full vigour and that an amendment should be allowed whenever it is just to do so even though it may deprive the defendant of a defence under the Statute of Limitations. There were a number of conflicting decisions. Ultimately the controversy was resolved by legislation in favour of a more liberal approach to amendment. Having considered the English authorities Keane J. dealt with the Irish rule as follows:-
“Treating it as a matter of principle, I think one can start by positing a somewhat extreme set of circumstances. A person is injured in a traffic accident and issues proceedings within the limitation period. In his statement of claim, he described the accident as having happened at O’Connell Avenue, Finglas, Co. Dublin. In fact, the point at which the accident occurred is in the City of Dublin. A pedantic counsel asks the court to permit an amendment of the statement of claim. At this stage, the limitation period is run. The trial judge allows the amendment notwithstanding that the limitation period has expired, on the ground that Weldon v Neal has no application as neither a new cause of action nor any new facts of any significance are being added.
It is obvious that in such a case the defendant is not deprived of any defence under the Statutory of Limitations 1957: he never had such a defence in the first place since the plenary summons and statement of claim were issued within the limitation period. That example simply serves to illustrate that the pleadings which initiate an action in this court carried with them from the time they are issued or delivered the potentiality of being amended by the court in the exercise of its general jurisdiction to allow a party to amend his endorsement of claim or pleadings ‘in such manner and on such terms as may be just’. Where, as here, an amendment, if allowed, will not in any way prejudice or embarrass the defendant by new allegations of facts no injustice is done to him by permitting the amendment. In that sense, it is true to say that the amendment does not in truth deprive him of a defence under the Statute of Limitations 1957: since the proceedings were always capable of amendment in such manner as might be just in order to allow the real question in controversy between the parties to be determined, it cannot be said that the defendant was at any stage in a position to rely on the Statute of Limitations 1957.
The evolution of the law in the neighbouring jurisdiction demonstrates, I think, that the difficulties that have arisen can be traced, no so much to the decision in Weldon v Neal, as to an over-rigid application of the principle laid down in that case. Where, as here, the plaintiff seeks to add a new cause of action arising out of – to borrow the words of the English rule – ‘the same facts or substantially the same facts’ there seems no reason why this court, even in the absence of a corresponding rule in this jurisdiction, should be precluded from permitting such an amendment.

I will accordingly allow the amendment sought.”

Order 28, Rule 1, was considered by the Supreme Court in Croke v Waterford Crystal, [2005] 2 IR 383. It was held that on an application to amend the first matter to be considered by the court is whether the amendment sought is necessary for the purpose of determining the real questions in controversy in the litigation. The court will consider whether the amendment can be made without prejudice to the other party. If the possible prejudice is exposure of the other party to additional expense that can be regulated by a suitable order as to costs. A very late application to amend is less likely to succeed particularly if the amendment is a purely technical point. Krops v Irish Forestry Board Limited was expressly approved of.

In summary the law as to amendment now is that an amendment will be allowed if it is necessary for the purposes of determining the real issues in controversy between the parties. The addition of a new cause of action by amendment will be permitted notwithstanding that by the date of amendment the Statute of Limitations had run if the facts pleaded are sufficient to support the new cause of action. Facts may be added by amendment if they serve only to clarify the original claim but not if they are new facts. Simple errors such as an error in date or an error as to location which do not prejudice the defendant and enable the real questions in controversy between the parties to be determined will be permitted.

The amendment sought here by way of the addition of causes of action does not satisfy these requirements. In order to sustain the new causes of action additional facts are required to be pleaded and indeed the notice of motion sought amendment of the statement of claim by the addition of the necessary pleadings of fact. These amendments should be disallowed. Similarly the amendment of the statement of claim by pleading additional facts relating to additional publication to the Revenue Commissioners and Phoenix Magazine should be disallowed. The Statute of Limitations may well have run and the defendants would be prejudiced by the amendments sought as to additional publication.

I would allow the appeal and refuse the plaintiff leave to withdraw the notice of discontinuance and refuse the plaintiff leave to amend his statement of claim.

 

Smyth v Tunney & Ors

Webb v Minister for Finance

[2009] IEHC 534

JUDGMENT of Mr. Justice Herbert delivered on the 3rd day of December 2009
The plaintiff’s claim in this action arises out of a road traffic accident which occurred on the 22nd April, 2002. The plaintiff claims that he was standing in the turret of an armoured personnel carrier travelling along the public roadway when it was struck from behind by another armoured personnel carrier. An Ordinary Civil Bill was issued on behalf of the plaintiff on the 26th April, 2004. The particulars of negligence and breach of duty contained in the Indorsement of Claim relate exclusively to the manner in which the servant or agent of the defendant drove the armoured personnel carrier which collided with the one in which the plaintiff was travelling.

In the particulars of personal injuries it is pleaded that the plaintiff came under the care of the Army Medical Corps. He was found to have suffered shock, pain, general bruising and, moderate to severe soft tissue injury in the areas of his neck and low back. It was anticipated that the plaintiff would make a full recovery. However, as he continued to suffer pain and discomfort the possibility of other personal injuries had to be left open. In April, 2003, the plaintiff was passed fit for service in the army. He was allocated light duties and declared medically unfit for volunteer service overseas.

On the 14th May, 2004, the Solicitors for the defendant submitted a very extensive request for particulars. On the 11th June, 2004, a notice of further particulars of personal injuries was delivered on behalf of the plaintiff and was accepted by the defendant. It was stated that despite medical treatment the plaintiff continued to suffer low back pain with the addition of pain in his left buttock radiating into his left leg. He also suffered paraesthesia and numbness in his left leg. A consultant orthopaedic surgeon had found evidence of a lumbar disc protrusion on clinical examination. On the 2nd September, 2004, the solicitors for the plaintiff furnished replies to the defendant’s request for particulars.

A defence was delivered on behalf of the defendant on the 20th December, 2004. It was denied that the plaintiff sustained the alleged or any personal injuries, loss, damage, inconvenience or expense. No admission was made with regard to the special damage claimed and the plaintiff was put on full proof thereof. It was pleaded that the plaintiff had failed to mitigate his loss. No particulars of this latter plea were furnished in this defence. On the 1st November, 2006, the solicitors for the plaintiff sought particulars of the respects in which it was alleged that the plaintiff had failed to mitigate his loss. From the papers furnished to the court, it does not appear that any reply was received from the defendant to this request.

On or about the 13th November, 2006, an application was made to the Circuit Court for an order transferring the case to the High Court. This application was grounded on an affidavit of the plaintiff. At para. 5 of this affidavit it was stated that an MRI Scan carried out in 2005 showed a disc protrusion at the L5/S1 level which Mr. J. Rice, a Consultant Orthopaedic Surgeon, advised the plaintiff in a report dated the 8th June, 2005, was probably due to the road traffic accident on the 22nd April, 2002. At para. 7 of his affidavit the plaintiff stated that he was scheduled to appear before the Army Medical Board and that this Board might recommend that he be discharged from the army. At para. 8 of this affidavit the plaintiff averred that he had been advised by Senior Counsel that the level of special damage claimed brought the case into the jurisdiction of the High Court.

This transfer application was opposed by the defendant. In an affidavit dated the 19th January, 2007, Louise Boughton, Solicitor in the State Claims Agency, stated that no particulars of special damage had been furnished. She claimed that it was just speculation on the part of the plaintiff that he would be discharged from the army. She averred that there was no medical basis to justify a transfer of the case from the jurisdiction of the Circuit Court to the High Court. She stated that the plaintiff had been examined by Dr. Michael Kelly on the 31st May, 2004, on the 8th March, 2005 and on the 10th August, 2005. He found that the plaintiff’s cervical spine was normal and that he had a full range of neck movements. He considered that the disc protrusion was causing no problems, and that the plaintiff had only suffered a soft tissue type injury in the area of his low back. In his opinion the plaintiff only required a fitness programme to strengthen the muscles in his lumbar area. This deponent further stated that the plaintiff had been examined at the request of the defendant, by Mr. McQuillan, a Consultant Orthopaedic Surgeon, on the 13th September, 2009. He agreed with the opinion expressed by Mr. Rice that the disc protrusion was not compressing any nerve and surgical intervention was not required. There was no structural abnormality in the plaintiff’s cervical spine. He considered that any residual effect of the accident on the 22nd April, 2002, was minor at that time. The plaintiff required controlled rehabilitation of the muscles in the region of his lumbar spine. He could return to work but should avoid factors which might provoke symptoms in his low back.

By Order of the County Registrar made on the 11th February, 2007, the case was transferred to the High Court. By Order dated the 7th June, 2007, the Master of the High Court adopted the proceedings into the High Court.

On the 12th August, 2008, a notice of further particulars of negligence was delivered on behalf of the plaintiff. This was rejected by the defendant. By a motion on notice dated the 3rd July, 2009, the plaintiff now seeks an order of this Court, pursuant to the provisions of O. 28 of the Rules of the Superior Courts, permitting the plaintiff to amend the pleadings in the action to include further particulars of negligence and breach of duty, together with such further and other Order as the Court should consider necessary. These further particulars of negligence and breach of duty are as follows:-

“The Plaintiff was a member of the Defence Forces and was at all material times under the care of the Army Medical Corp and was entitled to a full and comprehensive medical service to include (inter alia) monitoring, supervision and investigation of his medical complaints, in particular injuries sustained by him in service.

1. The Defendant failed to provide full and comprehensive medical service to the Plaintiff.
2. The Defendant failed to monitor the Plaintiff’s ongoing complaints of back problems, which arose from his injury in April 2002.

3. The Defendant failed to respond to the Plaintiff’s requests to be forwarded for an MRI Scan and/or other appropriate investigative procedures for a period of approximately three years following the accident.

4. The Defendant failed to anticipate that the Plaintiff, who sustained a back injury in an armoured personnel carrier would and did in fact require an MRI Scan.

5. The Defendant failed to implement a policy whereby military personnel who sustain injuries when knocked about in armoured personnel carriers, in particular when struck in the back by the armour plated steel of the rim of a turret, are sent immediately for an MRI Scan and/or other comprehensive investigative procedure.

6. The Defendant failed to respond to the Plaintiff’s request for comprehensive investigative procedures, to be conducted on him, at the earliest opportunity.

7. The Defendant failed to monitor the Plaintiff’s condition, and to note that the Plaintiff had subsequent incidents of falls associated with back pain, some of which occurred in the course of his duties, which the Plaintiff at all material times, indicated were related back to the injury in April 2002.

8. The Defendant failed to investigate why the Plaintiff suffered such ongoing problems with his back.

9. The Defendant caused or permitted the Plaintiff to be brought before an Army Medical Board, whose purpose was to determine if he should be or could be retained in the service because of his ongoing back problem, when he had not been provided with comprehensive investigative procedures at the earliest opportunity.

10. The Defendant failed to monitor the Plaintiff’s back condition and/or monitor his status on light duties, so as to avoid subsequent incidents of back pain, leading to falls or otherwise to the exacerbation of his back condition.

11. The Defendant failed to identify suitable and appropriate light duties for the Plaintiff to perform so as to avoid exposure to the risk of exacerbation of his back condition, which ultimately led to his medical discharge from the Defence Forces.

12. The Plaintiff reserves the right to plead further and other particulars of negligence and breach of duty as come to his attention, either before or at the hearing of the action.”

This motion on notice is grounded on the affidavit of Evelyn McMahon, Solicitor for the plaintiff sworn on the 1st July, 2009. At para. 7 of the affidavit, this deponent states that the defendant had failed to make discovery of the plaintiff’s medical records prior to early 2008, following the service of a motion for discovery. The plaintiff was not in a position to file these further particulars of negligence pending sight of his medical documentation. Voluntary discovery of these documents was sought by a letter dated the 17th January, 2008, in a Replying Affidavit sworn on the 15th October, 2009, Erica Fagan, Solicitor on behalf of the defendant and Head of the Litigation in the State Claims Agency, states at para. 4 that while the plaintiff received discovery of the documentation associated with his medical discharge from the Defence Forces in early 2008, he had been furnished on the 9th September, 2005, with the medical records relating to his medical history and the treatment received by him from the Army Medical Corps in respect of the road traffic accident on the 22nd April, 2002. Receipt of these records was acknowledged by a letter dated the 15th September, 2005, from the solicitors for the plaintiff. An Affidavit of Discovery was sworn in respect of those medical records and was furnished to the solicitors for the plaintiff on the 28th July, 2006.
At paras. 9 and 10 of her affidavit sworn on the 1st July, 2009, the solicitor for the plaintiff avers as follows:-

“9. I say and believe that the Plaintiff was not aware of the nature and significance of his injuries until such time as the defendants saw fit to discharge him from the Defence Forces as being below physical standards in 2007 and furthermore he is not in a position to outline all the particular treatment and care which was provided and/or not provided to him while a member of the Defence Forces, until such time as his medical records were made available.
10. Accordingly, I say and believe that it is appropriate for the Plaintiff to plead the various particulars outlined, in relation to his medical treatment following his accident. I say and believe that as a member of the Defence Forces he is provided with medical services by the Army Medical Corps. Accordingly, if a person sustains an injury while in service and continues to make complaints thereof and such complaints are not monitored, I believe that it is appropriate on receipt of documentation, namely his medical records, to file Further Particulars of Negligence and Breach of Duty.”

In her replying affidavit sworn on the 15th October, 2009, the solicitor for the defendant avers as follows at paras. 5, 6 and 7:-
“5. I say that the decision taken to discharge the Plaintiff from the Defence Forces because he was below physical standards in 2007 has no relevance to the question as to whether or not he received appropriate medical treatment in 2002 and therefore I do not see how the Plaintiff’s solicitors can place any reliance on same.
6. I say that the Defendant has located the various persons who formerly treated the Plaintiff as part of the Army Medical Corps, although three of these individuals are no longer serving with the Defence Forces. However, I say that some seven years have elapsed since the said treatment was administered and this is now the first notification which the Defendant has received that a claim in respect of medical negligence is being mooted. In all the circumstances, the Defendant has been unduly prejudiced by the Plaintiff’s delay in formulating this claim as it has not previously been investigated and the personnel involved have not previously been asked to consider the allegations being made against them.

7. I say and believe that in this deponent’s respectful submission, if the amendment sought by the Plaintiff herein is allowed, then it would permit the Plaintiff to defeat the statute as far as the medical negligence claim is concerned and remove the Defendant’s entitlement to rely upon the statute which in all the circumstances would be improper and unjust. I say that the Plaintiff is in effect seeking to add a new cause of action to his claim arising from different facts which pertain to the original proceedings and in all the circumstances I pray this Honourable Court to refuse the relief sought in the Notice of Motion herein.”

DECISION
I am unable to accept the argument that the plaintiff by these proposed “further particulars of negligence” is in fact seeking to pursue a new cause of action in the form of a medical negligence claim against the Army Medical Corps, which would be statute barred at the date of the Order sought on this motion. The plaintiff’s proceedings based on a claim of negligence were issued within the limitation period. As was pointed out by Keane J. (as he then was) in Krops v. Irish Forestry Board Limited and Ryan [1995] 2 I.L.R.M. 290 at 296, (confirmed on Appeal, 28th July, 1995), pleadings which initiate an action, carry with them from the time they are issued or delivered the potentiality of being amended by the Court. The wide power conferred on the Court by O. 28 of the Rules of the Superior Courts to permit an amendment of pleadings at any stage of the proceedings for the purpose of determining the real question in controversy between the parties, is to enable the court to do justice between them, (Bell v. Pederson and Sandoz Ringaskiddy Limited [1996] 1 I.L.R.M. 290 at 297 per. Kinlan J.). In Rubotham (Infant) v. M and B Bakeries Limited [1993] I.L.R.M. 219 at 221, Morris J. held that if the court is satisfied that there was no irremediable prejudice to the other party, it could permit an amendment even though it was fundamental and introduced into the action a claim for relief which had not originally been made.
In the instant case I find that the plaintiff, though seeking to introduce into the existing action a claim which was not originally made, is not attempting to add a new and distinct cause of action. It is reasonably arguable, – the determination of the issue must await the hearing of the action, – that it was a direct, foreseeable and proximate consequence of the already pleaded negligence that the plaintiff might require medical treatment and, a failure to provide proper treatment might cause him further damage, even if the nature and gravity of that damage was not reasonably foreseeable. Even though the proposed amendment must inevitably result in new facts being added to the case already pleaded, in my judgment, the new claim is germaine to, connected with and, arising out of the original cause of action and is not a new cause of action. I do not consider that granting the proposed amendment would prejudice the rights of the defendant by allowing the plaintiff to raise a claim which is statute barred. The Ordinary Civil Bill was issued within the limitation period so that a defence under the Statute of Limitations was never available to the defendant.

In the case of Worri Bank and Hanvit LSP Finance Limited v. KDB Ireland (Unreported, High Court, 17th May, 2006), Clarke J. applying the decision of the Supreme Court in Croke v. Waterford Crystal Limited [2005] 2 I.R.383, held as follows [Par. 3.2.]:-

“In addressing the question of prejudice it is, of course, important to recollect that a party does not require any leave of the court to formulate its pleading (whether of claim or defence), in any manner it chooses in the first place. A party has a very wide discretion as to the manner in which it may plead its case or its response. Insofar as there are limitations, same stem from the rules of court which permit aspects of pleadings to be struck out in the unusual and limited circumstances where the pleadings may be found to be inappropriate by being, for example, vexatious, scandalous or disclosing no cause of action. Subject to those limitations a party is at large as to how it pleads. Where a party fails to include an appropriate plea it may be placed in a position of requiring a court order to amend. However the starting point for a consideration of whether to allow the amendment should be to have regard to the fact that the party could have included the plea in the first place without requiring any leave from the court. Prejudice needs to be seen against that background. The prejudice that needs to be established must be a prejudice which stems from the fact that the proceedings have progressed on one basis and are now sought to be altered. The prejudice must stem, therefore, from the fact of the belated alteration in the pleadings rather than the presence (if allowed) of the amendment itself. Such prejudice can, in principle, arise in one of two ways.
Firstly a party resisting the amendment may be able to satisfy the court that, by virtue of the absence of the amended plea in the first place, steps have been taken which now make it impossible or significantly more difficult to deal with the case should the amendment be allowed.

. . .

Secondly a party may be able to persuade the court that what I might call logistical prejudice would occur if the amendment is allowed. This will particularly be the case where the amendment is sought at a very late stage and could have the effect of significantly disrupting the intended proceedings. In such cases it may be that an amendment which could properly have been made at an earlier stage might be refused because to permit the amendment would have the effect of so altering an imminent trial as to require a significant adjournment to the prejudice of the party against whom the amendment is sought.”

I am satisfied on the affidavit evidence, that the defendant will not suffer irremediable prejudice should the proposed amendment be allowed. The medical personnel who, as members of the Army Medical Corps, treated the plaintiff following the road traffic accident have been traced and are available to give evidence should that become necessary. There is no evidence that Dr. Kelly, Mr. Rice and Mr. McQuillan are unavailable to give evidence. The plaintiff’s medical records, the documents relating to his discharge from the Army and, medical reports from Dr. Kelly, Mr. Rice and Mr. McQuillan are all available. While the new claim may add to the length and to the cost of the trial I do not accept at this juncture that this would be sufficient to refuse to allow the amendment now sought.
The court will allow the amendment sought. I will hear the parties with regard to terms (if any) and costs.

 

Fitzgerald v MGN Ltd

[2010] IEHC 259

Judgment of Mr Justice Michael Peart delivered on the 28th day of June 2010:

On the 28th July 2009 the plaintiff issued a Plenary Summons in which he named Mirror Group Newspapers Limited as defendant. By so doing it was the plaintiff’s intention to claim damages for libel against him arising from an article which appeared in The Irish Daily Mirror on the 30th July 2003. The plaintiff believed at that time of issue of these proceedings that the defendant company was the publisher of that particular newspaper, and had carried out a search which satisfied him that the registered office of the defendant company was Liberty Hall, Dublin 1.

The date of issue of these proceedings was just two days within the 6 year limitation period for such proceedings under the Statute of Limitations, 1957.

He was informed that the Mirror Group were at that time located at North Circular Road. He went to that address and met with a James McNamara who received the plenary summons from the plaintiff. Not having received any Entry of Appearance on behalf of the named defendant, the plaintiff wrote to the company on the 21st August 2009 calling upon it to enter an appearance, and enclosing a letter of consent to late appearance. The plaintiff has exhibited a letter dated 21st August 2009 from McCann Fitzgerald, solicitors, which makes no reference to the said letter from the plaintiff to the defendant company of the same date, so presumably these letters crossed in the post. That firm stated that they represent “MGN Limited” who had passed to them the proceedings issued against Mirror Group Newspapers Limited. It went on to point out that the Irish Daily Mirror Newspaper was published by MGN Limited and not the company named as defendant, and that the proceedings were therefore issued against the wrong company at an incorrect registered office, and called upon the plaintiff to discontinue the proceedings.

The plaintiff replied to that letter by letter dated 4th September 2009 stating that his proceedings had been accepted on behalf of “your client” by James McNamara, Deputy News Editor “of your client” on the 28th July 2009, and stated that in such circumstances the proceedings were validly issued and served and again called upon the firm to enter an appearance.

By 24th November 2009 the plaintiff had received no reply to his letter dated 4th September 2009, and wrote a reminder letter to which a reply was made by letter from the same firm dated 2nd December 2009. That letter again stated that the firm did not act for Mirror Group Newspapers Limited and again stated that this company was not the publisher of the newspaper which the plaintiff claims had defamed him. It explained again that the Irish Daily Mirror was published by MGN Limited with a registered office at One Canada Square, Canary Wharf, London E14-5AP, and that this information is printed on every copy of the newspaper in question, including that in which the article in question appeared on the 30th July 2003.

That letter went on to make the point that any proceedings which the plaintiff may thereafter issue against the correct defendant, MGN Limited, would be “out of time” not having been issued within 6 years of the date of publication of the article in question, and requested that in any application which the plaintiff might make to the High Court in relation to the matter this letter would be brought to the Court’s attention.

On the 18th January 2010 the plaintiff in person made an ex parte application to the High Court in order to amend the name of the defendant to MGN Limited. That order was granted.

On the 8th February 2010 the plaintiff made a further ex parte application and obtained an order permitting further amendments to the plenary summons by inserting the registered office of MGN Limited, namely 1, Canary Square, Canary Wharf, London, and including also therein the indorsement in order to indicate that that the proceedings are such as come within Council Regulation (EC) No. 44/2001, thereby enabling the proceedings to be served outside the jurisdiction without the need to obtain any order for service outside the jurisdiction.

The plaintiff failed to carry out these amendments within the permitted time under the Rules of the Superior Courts, and on the 15th March 2010 he applied for and obtained an extension of time for doing so. The amendments were carried out in due course by the plaintiff.

By letter dated 16th April 2010 the plaintiff wrote to McCann Fitzgerald and enclosed a copy of the amended plenary summons, together with the orders made by the High court on the 18th January 2010 and 8th February 2010 respectively, and requesting entry of appearance.

That firm has entered an appearance in order to protect its client’s position so that no judgment would be applied for in default of appearance, but maintains that the amendment of the title of the proceedings whereby MGN Limited is named cannot protect the plaintiff from a claim by that defendant that the claim is statute-barred given that the amendment was ordered outside the limitation period.

In due course, Counsel for the defendant mentioned the matter to this Court (the plaintiff being present also) in view of the defendant’s concerns, and leave was given to issue a Notice of Motion to set aside the orders which the plaintiff had obtained on an ex parte basis.

The grounding affidavit of Lesley Caplin, solicitor for the defendant and the replying affidavit filed by the plaintiff in response thereto add nothing to the sum of knowledge thus far, except, and quite importantly, the plaintiff has stated clearly in this affidavit that the application which he moved on the 18th January 2010 was an application pursuant to the provisions of Order 15 of the Rules of the Superior Courts, 1986 (“RSC”).
Submissions:
The first matter to emphasise is that this is an application by the Defendant to set aside the ex parte orders which the plaintiff applied for and obtained on the dates referred to above. It is not an application to strike out the proceedings or otherwise dismiss them on the basis that no reasonable cause of action is disclosed, or that because of a Statute of Limitation issue which will be pleaded by MGN Limited, they have no prospect of success.

The defendant submits that being an application to substitute a party under Order 15, rule 13 RSC, and not one under the provisions of Order 63, rule 1 (15) RSC simply to correct a clerical error in the name of a defendant who was at all times the intended target, the application firstly ought to have been on notice; but secondly that in any event the Court ought not to have granted the order dated 18th January 2010 in circumstances where the effect of the order was to commence the proceedings from that date against MGN Limited, an entirely separate company, and at a time when the plaintiffs claim against that company was already clearly statute-barred, being well outside the six year limitation period.

The plaintiff, appearing personally in Court to argue his case before me, has stated that he honestly believed that Mirror Group Newspapers Limited was the correct defendant in order to make a claim in respect of an article appearing in the Irish Daily Star. He has also sought to derive solace from the fact that service in respect of that defendant was accepted by an employee of MGN Limited at the premises on North Circular Road, and he has exhibited a copy of a business card handed to him by that employee at that time, and which bears the name MGN Limited below the employee’s name. He submits that there can be no prejudice given that it is clear from the Indorsement of Claim that it is clear that it is the Irish Daily Star which published the article complained of. As I have already stated he had made a company search and found details of Mirror Group Newspapers Limited and presumably he assumed that this was the correct defendant. He appears not to have inspected the newspaper in question to ascertain the identity of its publisher.

One can easily have some sympathy for someone in the position of the plaintiff, particularly where he appears personally and has not engaged lawyers to act on his behalf. Such a plaintiff cannot be in a position to be know how precisely a large publishing empire has organised its corporate structure. Such structures can be labyrinthine in nature, with many subsidiary and associated companies which operate individual enterprises within the overall group. Nevertheless, in the present case, it is a fact that the publisher of a newspaper is required to state its identity in its newspaper, and it would appear from the correspondence which has emanated from McCann Fitzgerald that it was done in the newspaper complained about herein.

I am satisfied first of all that the error which the plaintiff sought to correct cannot be characterised as a clerical error. It has not occurred through “the mechanical process of writing or transcribing” – a phrase used by Fullager J. in less technically advanced times than now to describe a clerical error in R. v. Commissioner of Patents, ex parte Martin [1953] 89 CLR 381, and which is adopted by Hardiman J. in Sandy Lane Limited v. Times Newspapers Limited and Others, (Unreported, Supreme Court, 16th November 2009). The learned judge distinguishes such a mistake from one arising from a lack of knowledge or wrong information as discussed in Re Meres Application [1962] RPC 182. In any event, the plaintiff has not sought to bring his application within Order 63, r. l (15) RSC. He accepts therefore that the amendment was not because of a clerical error as such, but is an application to substitute a different defendant for the defendant originally named in the proceedings.

I am not too concerned as to whether or not the plaintiff’s application ought more properly have been brought by way of Notice of Motion. It probably should, given that the plaintiff had received correspondence from McCann Fitzgerald. On the other hand that firm had not entered any appearance and were not on record, and furthermore, in their letter dated 2nd December 2009, they had requested the plaintiff to bring their letters to the attention of the Court in any application which he may wish to make.

Given the opportunity which any party affected by an order obtained ex parte has to seek to have it set aside, nothing much turns on this issue in the present case, and indeed, the defendant does not make the submission as its primary one.

The central issue for determination really is a simple one, namely whether the Court ought not to add or substitute a party as a defendant to proceedings under Order 15 RSC in circumstances where it is known that as of the date of such order the limitation period has already expired and that the statute will be pleaded in any Defence which may be delivered by that party. This question was considered comprehensively by O’Neill J. in Kinlon v. Córas Iompair Éireann, (Unreported, High Court, 18th March 2005). That was a case where the plaintiff had issued proceedings arising out of injuries sustained by the plaintiff when she was hit by a bus in Dublin. The proceedings which were issued named Córas Iompair Éireann as defendant, whereas the correct defendant was Bus Átha Cliath. The plaintiff delayed in making an application to substitute the latter company, but eventually did so by way of an application to the Master of the High Court who refused to make the order sought. The plaintiff appealed.

During the course of a careful and comprehensive judgment, the learned O’Neill J. examined an apparent conflict between two judgments of the Supreme Court relating to this type of issue, namely those in O’Reilly v. Granville [1971] I.R. 90 and Allied Irish Coal Supplies Limited v. Powell Duffryn International Fuels Limited [1998] 2 IR 519. In that regard, and as noted by O’Neill J. the late Shanley J. had in Southern Mineral Oil Limited (in liquidation) v. Cooney (No. 2) preferred the conclusion in the latter case on the basis that he was bound to follow the later decision. However, O’Neill J. identified that in Allied Irish Coal Supplies Limited v. Powell Duffryn International Fuels Limited there is no indication therein that O’Reilly v. Granville was referred to in argument, and that it could not be the case in such circumstances that O’Reilly v. Granville should remain good law which he was bound to follow. Left with two decisions which diverge, O’Neill J. for the reasons stated by him preferred to rely still upon the long-standing authority of O’Reilly v. Granville.

Having carried out an extensive examination of the relevant case-law, he concluded that the law in this country in relation to this topic is to the following effect:

“In summary therefore I take the law on this topic to be to the following effect:
1. There is no established rule of practice to the effect, that where a defence under the Statute of Limitations may be available to a proposed defendant that such proposed defendant should not be joined as a defendant in proceedings under O. 15 (13) of the Rules of the Superior Court.
2. The joinder of an additional defendant does not have the effect of deeming that defendant to have been a party to the action from the date of issue of the original writ. An added party cannot be considered to have been a party to the proceedings earlier than the order giving leave to add. Therefore there is nothing in the Rules of the Superior Courts or in substantive law which would restrict an added defendant’s right to rely on a defence under the Statute of Limitations, i.e., an added defendant’s right to plead the Statute cannot be adversely affected, by his being joined to the action.
3. A defence under the Statute of Limitations must in every case be pleaded. [See O. 19 r. 15].
4. A court should not assume that a proposed defendant sought to be joined under the O. 15 (13) would avail of a defence under the Statute of Limitations.
5. The court in an application under O. 15 (13) to join an additional defendant should not attempt to determine in advance that a potential defence under the Statute of Limitations Act will be successful.”
I respectfully agree with these conclusions, and propose to decide the present application by reference to them.
It follows that it was open to the Court, albeit on foot of an ex parte application, to permit the plaintiff to substitute MGN Limited as the defendant in these proceedings in place of Mirror Group Newspapers Limited. However, it is clear that by so permitting, the entitlement of MGN Limited to plead the Statute of Limitations in any Defence it may choose to deliver is in no way diminished, since the joining of that company as a defendant operates only from the 18th January 2010 and in no way results in a situation whereby the proceedings are deemed to have been commenced against MGN Limited as of the date of issue of the plenary summons.

Clearly, it is highly probable that the defendant will plead the statute, but it is not a matter for this Court to prejudge the likely outcome of that plea at this point in time, when it has not as yet been pleaded. But the plaintiff should be aware that in the event that he fails to overcome that defence, should it be made in due course, he will be exposed to the possibility at least of an order for the costs of the proceedings should they be dismissed.

For the moment, however, it is appropriate that I refuse the application of the defendant to set aside the orders of the 18th January 2010 and that of the 8th February 2010.

Sandy Lane Hotel Ltd v Times Newspapers Ltd

[2010] IEHC 443

JUDGMENT of Kearns P. delivered on the 10th day of December, 2010.
This is an application for an order pursuant to Order 15, rule 2 of the Rules of the Superior Courts, 1986 substituting “Sandy Lane Hotel Co. Limited” (hereinafter referred to as “the proposed plaintiff”) for “Sandy Lane Hotel Limited” (hereinafter referred to as “the plaintiff”) as the plaintiff in this action.

The plaintiff is a holding company formed in 1996 which is registered under the laws of St. Lucia. The proposed plaintiff is the wholly owned subsidiary of the plaintiff. The proposed plaintiff is the owner and operator of a world-renowned hotel business, the Sandy Lane Hotel, in Barbados. The plaintiff herein claimed damages for libel against the defendants arising from the publication of an article in the Sunday Times on the 1st March, 1998. The first defendant is the publisher of the article and the second and third defendants are journalists and authors of the article.

The proceedings were instituted against the defendants by way of plenary summons dated the 15th June, 1998, with affidavits being exchanged by the parties in April, 2001. The proceedings were dormant until June, 2004 when a Notice of Intention to Proceed together with a Notice of Trial were served.

Following a review of the discovery made by the plaintiff, it emerged that the plaintiff’s name on the title to the proceedings was incorrectly stated as being “Sandy Lane Hotel Limited” and not “Sandy Lane Hotel Company Limited”. The plaintiff then brought an application pursuant to O. 63, r. 1 (15) of the Rules of the Superior Courts for an order correcting the name of the plaintiff in the proceedings. The High Court granted the order sought. The defendants successfully appealed that order to the Supreme Court where Hardiman J. delivered judgment (with Fennelly and Macken JJ. concurring) on the 16th November, 2009. As a result of the Supreme Court’s refusal to amend the title, this application was brought under Order 15 of the Rules of the Superior Courts.

SUBMISSIONS OF THE PLAINTIFF
Counsel for the plaintiff relied on three arguments when requesting the Court to grant the order sought as follows: First, that a bona fide mistake in the nomination of the plaintiff had occurred in this case; second, the change of name of the plaintiff was necessary for the proper determination of the libel proceedings initiated in 1998, and third, contrary to the submission of the defendants, delay in moving for relief should not be allowed to defeat the application.

It was counsel’s submission that the action was commenced in the name of the wrongly described plaintiff through a bona fide mistake. This was not a case of the plaintiff choosing the wrong party to take the action and then later seeking to bring in a different party and counsel relied upon the decision of Shanley J. in Southern Mineral Oil Ltd. (in liquidation) v. Cooney (No. 2) [1999] 1 IR 237. In that case Shanley J. had placed particular reliance on the test propounded by Millet J. in Re Probe Data Systems [1989] B.C.L.C. 561 at p. 563 in relation to the equivalent English rule at p. 247 which concluded that “[t]he mistake must have been a mistake as to the name or identity of the intended party”.

Counsel further submitted that the present application could be distinguished from the facts of Southern Mineral Oil Ltd. (in liquidation) v. Cooney (No. 2) on the basis that there was a genuine mistake as to the name or identity of the intended party.

Furthermore, counsel relied heavily upon the decision of Geoghegan J. in Kennemerland v. Montgomery [2000] 1 ILRM 370. The facts in that case satisfied Geoghegan J. that the proceedings were brought in the name of the wrong plaintiff due to a bona fide error and he accepted the affidavit evidence tendered on behalf of the applicant to that effect.

It was also submitted that the defendants acted at all times on the basis that they were being sued by the entity which owned and operated the Sandy Lane Hotel, i.e. the proposed plaintiff. The defendants did not plead that the plaintiff was not the owner of the Sandy Lane Hotel or its business or that it had no standing to sue.

Counsel submitted that the order sought pursuant to O. 15, r. 2 should be granted by this Court as it was clearly necessary for the proper determination of the real matters in dispute.

Counsel further submitted that the Statute of Limitations 1957 (as amended) could not be successfully invoked by the defendants as a means of defeating this application. It was submitted that it is not appropriate for this Court, at this juncture of the proceedings, to seek to determine the issue of whether or not the Statute of Limitations applies in the event that the proposed plaintiff is substituted for the plaintiff. Counsel argued that estoppel would ultimately arise and bar a defence on the Statute of Limitations on the basis of the clear acceptance by the defendants that they were being sued by the entity which owned and operated the Sandy Lane Hotel, i.e. the proposed plaintiff.

Counsel noted the important distinction between Order 15, rule 2 and Order 15, rule 13. Where a court adds a defendant pursuant to r. 13, the proceedings as against that defendant are deemed only to have begun on the making of the order adding that party as defendant. Therefore, the Statute of Limitations will apply to determine whether or not the plaintiff’s claim against the added defendant is statute barred as at the date of the making of the order adding the defendant. In contradistinction to this, O. 15, r. 2 does not make such a provision. The rationale underpinning the distinction lies in the fact that, in circumstances where the wrong person has been added as plaintiff through a bona fide mistake, the defendant has nonetheless been properly served with proceedings putting him on full notice of the case being made against him and putting him in a position to meet that case. Counsel argued that substituting the proposed plaintiff for the plaintiff ultimately causes no prejudice or injustice to the defendant. The underlying cause of action remains and would remain the same. Furthermore, the interests of justice demand that the error be corrected without the defendant being able to benefit from the “windfall” of a defence on the Statute of Limitations that was not available at the date of the writ.

Counsel referred to the case of Kennemerland v. Montgomery [2000] 1 ILRM 370. In that judgment, Geoghegan J. rejected the submission that he ought not to substitute a new party under O. 15, r. 2 on the grounds that the action at the suit of that new party was statute barred. Geoghegan J. further rejected the defendant’s reliance on the judgment of the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519 as that case concerned an application to add a defendant under O. 15, r. 13 and not under Order 15, rule 2. It was also the expressed view of Geoghegan J. that the Supreme Court in Allied Irish Coal Supplies Ltd. had not intended to, and had not in fact, overruled the earlier Supreme Court judgment in O’Reilly v. Granville [1971] 1 I.R. 90.

Counsel submitted that Clarke J. in Wicklow County Council v. O’Reilly [2006] IEHC 265 correctly summarised the applicable test and considered the distinction between r. 2 and r. 13 of O.15 and concluded that O. 15, r. 2 is concerned with an amendment to the name of a party even if this would have the effect of substituting another party. Such an order could only be made where a bona fide mistake had occurred – where one party sets out to sue X but erroneously describes or names X as Y, with the attendant consequence of suing Y instead of X. The intentions of the person making the mistake are determined in the light of all the surrounding circumstances. Clarke J. concluded that in such circumstances the Statute of Limitations would not apply. The more general jurisdiction of O, 15, r. 13 does not require that a bona fide mistake is established, however the Statute of Limitations will apply in such instances and the date of joinder will be deemed as the date of commencement of the action as against the joint party.

It was submitted that there has been no undue delay on the part of the plaintiff in dealing with the issue of correcting the name of the plaintiff. Upon realising the error, the plaintiff filed a motion in July, 2005 seeking to correct the name of the plaintiff pursuant to Order 63, rule 1 (15). This order was granted by the High Court in November, 2005. In December 2005, the defendants filed a Notice of Appeal against that order. The appeal was heard in the Supreme Court some three and a half years later and the Supreme Court, in allowing the appeal, delivered its reserved judgment in November, 2009. This application was issued promptly thereafter pursuant to Order 15, rule 2. It was the plaintiff’s contention that the facts of this case fall to be considered within O. 15, r. 2, such that the Statute of Limitations does not apply.

SUBMISSIONS OF THE DEFENDANTS
The defendants resisted the application on grounds as follows: first, there was no proper evidence of a mistake as provided for by O. 15, r. 2; second, the proposed new plaintiff’s claim was statute barred under and by virtue of the Statute of Limitations 1957 (as amended), and third, the Court should in any event exercise its discretion not to permit the substitution.

Counsel on behalf of the defendants submitted that the factual circumstances of this case did not evidence any mistake of the type provided for in O. 15, r. 2 of the Rules of the Superior Courts. These proceedings were instituted in the name of the St. Lucia company, a separate legal entity to the Barbados Company which is the proposed plaintiff. It was argued that these are two separate and distinct corporate entities which were incorporated in different jurisdictions. Counsel contended that Mr. Brian O’Sullivan, former company secretary for the plaintiff, must have been aware of this fact and the explanation offered in his affidavit that the omission of the word “Co.” was a simple error ignored the fact that the proceedings were initiated in the name of the St. Lucia company. It was submitted that the identity of the plaintiff was clear throughout and that following the publication of the article in the Sunday Times newspaper, letters of complaint were sent by Mr. O’Sullivan in the name of the plaintiff. Furthermore, the plenary summons identified the plaintiff as a St. Lucia company and the request for security for costs was based expressly on that fact which was not challenged or queried in any way.

Counsel on behalf of the defendants submitted that O. 15, r. 2, like O. 63, r. 1 (15), is inapplicable to the circumstances of this case as the rule cannot be used to correct a mistake as to the actual identity of the party which is sought to be sued. An order sought under O. 15, r. 13 would have been the appropriate order under which to make this application. Such an order would have been a less than satisfactory outcome for the plaintiff as the joinder of a plaintiff under such an order is subject to the relevant limitation period and the defendants relied in this regard on the decision in Southern Mineral Oil Ltd. (in liquidation) v. Cooney (No. 2) [1999] 1 IR 237.

It was further submitted that it would be contrary to the provisions of the Statute of Limitations 1957 (as amended) to permit the substitution of a new plaintiff at this stage of the proceedings and the plaintiff should not be allowed to subvert the Statute of Limitations in this manner. Counsel on behalf of the defendants submitted that, at the upper limit, any cause of action vested in the proposed plaintiff became statute barred on the 1st March, 2004. The defendants relied upon an English line of authority concerning the old English rule which corresponds to O. 15, r. 2 including the decision of the House of Lords in Ketteman v. Hansel Properties Ltd. [1987] 1 A.C. 189 which was relied upon as providing authority for the general principle that when a party is joined to an action he is deemed to be joined as of the date of joinder, i.e. “relation back” does not occur in such an instance. Furthermore, the decision of O’Neill J. in Kinlon v. Córas Iompair Eireann [2005] 4 IR 480 was relied upon as authority that “relation back” does not arise in circumstances where an order joining or substituting a new party is made by the Court.

Counsel on behalf of the defendants argued that the Court should, in any event, exercise its discretion not to permit the substitution on the grounds of delay and drew the Court’s attention to Hardiman J.’s judgment in the Supreme Court appeal in which he stated that:-

“Because of the delay (and there has been gross delay) the defendants might be able to object to the substitution of a new party on the grounds that the statute of limitations has run as against that party. Since this is a separate issue which may well come before the courts, I will say nothing about it. But I would not be prepared to deprive the defendants of the opportunity of raising it.”

DISCUSSION AND DECISION

There are three distinct provisions contained in the Rules of the Superior Courts relating to the alteration of the names of parties to proceedings: Order 63, rule 1 (15), Order 15, rule 2 and Order 15, rule 13. Order 63, rule 1 (15) has already been unsuccessfully invoked by the plaintiff. Of relevance to this particular application are rr. 2 and 13 of Order 15.

Order 15, rule 2 provides that:-

“Where an action has been commenced in the name of the wrong person as plaintiff, or where it is doubtful whether it has been commenced in the name of the right plaintiff, the Court may, if satisfied that it has been so commenced through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms as may be just.”
Order 15, rule 13 provides that:-
“No cause or matter shall be defeated by reason of the misjoinder or non-joinder of parties, and the Court may in every cause or matter deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the names of any parties improperly joined, whether as plaintiffs or as defendants, be struck out and that the names of any parties, whether plaintiffs or defendants, who ought to have been joined, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added….”
A myriad of case law, concerning the application of both r. 2 and r. 13 of O. 15, was opened to this Court. To ensure clarity for the rationale grounding this decision, I propose to deal with this case law and reconcile the apparent divergence between certain seminal judgments relevant to this case. Any such examination of the operation of rr. 2 and 13 of O.15 must commence with an examination of the decision in O’Reilly v. Granville [1971] I.R. 90. That case arose out of the plaintiff’s application to add a second defendant to those proceedings pursuant to Order 15, rule 13 of the Rules of the Superior Courts 1962. The Supreme Court allowed the plaintiff to add the second defendant even though the limitation period had expired as against that defendant.
The subsequent case of Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519 concerned an application for the joinder of co-defendant pursuant to Order 15, rule 13. The High Court held that the co-defendant would not be joined to the action where the claim against it would be statute barred. The Supreme Court, dismissing the appeal, held that the Court could not permit a person to be named as a defendant in an existing action at a time when that person could rely on the Statute of Limitations 1957 (as amended) to bar the plaintiff from bringing a fresh action against him. The Court further held that it had jurisdiction to refuse to add parties for the purpose of introducing a new cause of action. Ultimately, the Supreme Court deemed that the Court had a discretion to order the addition of a new defendant. However, it appears that the decision of O’Reilly v. Granville [1971] I.R. 90 was not considered by either the High Court or the Supreme Court in that case.

In the case of Southern Mineral Oil Ltd. (in liquidation) v. Cooney (No. 2) [1999] 1 IR 237, Shanley J. considered an application to add or substitute parties pursuant to O. 15, rr. 2 and 13. The applicants were companies that had been wound up by order of the High Court. The liquidator had commenced the proceedings in the name of the companies in liquidation on the basis of his belief that this was the correct manner in which to proceed. The applicants applied to have the liquidator substituted as the applicant in the matter. Shanley J., applying Re Probe Data Systems [1989] B.C.L.C. 561, held that the applicant could not be substituted pursuant to O. 15, r. 2 on the basis that the two crucial requirements in order for rule 2 to apply were not evident, namely; (i) that a bona fide mistake had occurred and (ii) this mistake had not misled or caused any doubt as to the identity of the intended plaintiff. Shanley J. observed that, even though a genuine mistake had occurred on behalf of the applicant, this was not a case under r. 2 on the basis that at all material times the respondents understood that the applicants were companies in liquidation and not the liquidator. Shanley J stated at p. 247 that:-

“To now allow an amendment would be to suggest that the respondents at all material times were in no real doubt but that the intended applicant was in fact the liquidator. This is patently not the case and for these reasons liberty to substitute the liquidator for the companies in liquidation pursuant to O. 15, r. 2, will be refused.”
Relying on the decision of the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519, Shanley J. held that the application under r. 13 failed on the basis that the cause of action against the proposed added defendants was statute barred. Of importance was the observation of Shanley J. that the attitude of the Supreme Court in O’Reilly v. Granville [1971] I.R. 90, (i.e. that the Statute of Limitations 1957 (as amended) was a matter for defence and it did not arise until pleaded) had changed since the decision in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519. Shanley J. stated at p. 246 that he felt “bound to follow” the later decision of the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd.
In Kennemerland v. Montgomery [2000] 1 ILRM 370, an application was made pursuant to O. 15, rr. 2 and 13 to substitute the plaintiff in the proceedings. Geoghegan J. in the High Court permitted an amendment under O. 15, r. 2 in circumstances where it was perfectly clear that the defendants, at all material times, knew that the wrong company had been named as a plaintiff. Furthermore, Geoghegan J. noted that the justice of the circumstance required the substitution to be made. Crucially the judgment of Geoghegan J. confronted the apparent divergence between the Supreme Court judgments of O’Reilly v. Granville [1971] I.R. 90 and Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519. In dealing with the decision of Shanley J. in Southern Mineral Oil Ltd. (in liquidation) v. Cooney (No. 2) [1999] 1 IR 237, Geoghegan J. stated that:-

“I think it highly unlikely that the Supreme Court in Allied Irish Coal would have been intending to overrule O’Reilly -v- Granville without actually saying so, particularly having regard to the detailed analytical judgments in that case. I think therefore that Allied Irish Coal Supplies -v- Powell Duffryn International Fuels Limited is simply a restatement of a long established principle that a Court will not add a defendant under Order 15 Rule 13 if the action is quite clearly statute barred. I do not think that it can be taken as authority for the proposition that if there is doubt as to whether a plea of the statute would be successful or not, the Court making the decision as to whether to join the additional party or not has to there and then decide the statute bar issue and accede to or refuse the application accordingly. But at any rate I do not think that the principles which apply in relation to an application under Order 15 r. 13 necessarily apply equally to an application under Order 15 r. 2.”
Therefore, it was the clear opinion of Geoghegan J. that the decision of the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519 did not overrule the decision in O’Reilly v. Granville [1971] I.R. 90. Furthermore, Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. was simply a restatement of a long established principle that a court will not add a defendant under O. 15, r. 13 if the action is quite clearly statute barred. It was held that the determination of a claim as being statute barred involved a consideration of numerous issues and it would be inappropriate to determine the issue at that stage of the proceedings. Whilst it was noted that the principles that govern applications under O.15, r. 13 do not necessarily apply to applications under O.15, r. 2, Geoghegan J. stated that where an application is made pursuant to r. 2, the court has a discretion to refuse the order sought in cases where the action is clearly statute barred beyond any doubt and it would be futile to do so. Geoghegan J. deemed that this was not such a case and accordingly deferred the limitation issue in that matter.
In Kinlon v. Córas Iompair Eireann [2005] 4 IR 480, O’Neill J. in the High Court also considered the judgment of Shanley J. in Southern Mineral Oil Limited (in liquidation) v. Cooney (No. 2) [1999] 1 IR 237 and the consequent apparent divergence in the Supreme Court judgments of O’Reilly v. Granville [1971] I.R. 90 and Allied Irish Coals Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519. As already noted, Shanley J. expressed the view that he was “bound to follow” the later decision of the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. O’Neill J. disagreed with Shanley J. in relation to this point on the basis that in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. the case of O’Reilly v. Granville was not cited to either the High Court or the Supreme Court. O’Neill J. stated at p. 492 that:-

“It would appear to me that since O’Reilly v. Granville [1971] I.R. 90 does not appear to have been considered by the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn Intl. Fuels Ltd. [1998] 2 IR 519 and expressly disapproved, it remains good law and insofar as I find myself with two conflicting Supreme Court authorities, I am inclined to prefer the reasoning of O’Reilly v. Granville.”
The decision of Clarke J. in Hynes v. The Western Health Board [2006] IEHC 55 and Wicklow County Council v. O’Reilly & Others [2006] IEHC 265 followed this line of authority and concluded that the authoritative decision on this issue was that of O’Reilly v. Granville [1971] I.R. 90.
Order 15, rule 2 makes provision for instances where an action has been commenced in the name of the wrong person as a plaintiff; it can be accurately summarised as being the rule governing the substitution of parties. I am mindful that r. 2 of O. 15 is imbued with its own limitations. The Court must be satisfied that the mistake was bona fide and that the order for substitution pursuant to r. 2 is necessary for the determination of the real matter in dispute. Also, an order pursuant to O. 15, r. 2 will not be made where to do so would constitute a new action (see Southern Mineral Oil Ltd.(in liquidation) v. Cooney (No. 2) [1999] 1 IR 237) .

Order 15, rule 13 concerns the procedure for adding, substituting or striking out a party. The names of any parties may be added, whether plaintiffs or defendants, who ought to have been joined, or “whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter”.

There are, however, two important distinctions between Order 15, rule 2 and Order 15, rule 13. First, in relation to r. 13, it is not necessary for the applicant to establish that a bona fide mistake occurred. Secondly, where a court makes an order pursuant to O. 15, r. 13 the proceedings against the new party are deemed to have commenced only on the date of the making of the order adding that party. This may, therefore, have significant implications concerning the computation of the relevant limitation period in accordance with the Statute of Limitations 1957 (as amended). Order 15, rule 2 does not contain such a provision, however, it nonetheless contains the requirement that the mistake be one of a bona fide nature.

These proceedings have been commenced in the name of the wrong person as plaintiff. This Court is satisfied that the mistake which occurred in the naming of the plaintiff was indeed a bona fide mistake. In this respect the plaintiff has crossed the first hurdle in relation to the application of Order 15, rule 2. The second hurdle which has been identified, and is set out in r.2, is that it must be shown that an order mandating the addition or substitution of a plaintiff is “necessary for the determination of the real matter in dispute”. This Court is fully satisfied that this criterion also has been fulfilled in this instance. The third hurdle, which has been identified by the case law cited above, is to inquire whether the underlying cause of action remains the same. This is the case in this instance. The final hurdle which the plaintiff must satisfy is that should the Court grant the order sought pursuant to O. 15, r. 2, no prejudice or injustice will fall upon the defendant. It is this Court’s view that the defendants were properly served with proceedings and put on full notice of the case being made against them. The defendants will suffer no prejudice or injustice in this instance by this Court granting such an order. On the basis of the clarification of precedent case law, I am satisfied that the judgment in O’Reilly v. Granville [1971] I.R. 90 represents the authoritative case law on this point. (See also the decisions in Kennemerland v. Montgomery [2000] 1 ILRM 370, Kinlon v. Córas Iompair Eireann [2005] 4 IR 480, Wicklow County Council v. O’Reilly [2006] IEHC 265 and Hynes v. The Western Health Board & Anor. [2006] IEHC 55.)

I am satisfied that there is ample authority for concluding that relief should be granted on facts such as have arisen in this case. As to the Statute of Limitations issue, this Court declines to exercise its discretion to refuse to make the order pursuant to r.2 on the basis that the claim is statute barred and futile in practice. This is not such a case. I will therefore grant that the amendment sought be allowed pursuant to Order 15, rule 2 of the Rules of the Superior Courts.

 

Purcell v Taylor

, High Court

, May 26, 2004, Peart J.
Judgment of Mr Justice Michael Peart delivered the 26th day of May 2004:
By Order of the Master, Mr Dermot Nolan 9″the applicant”) and Mr Michael O’Halloran were added as co-defendants in these proceedings.

The applicant has by Notice of Motion dated 23rd February 2004 applied to this court by way of appeal from the said Order which added him as a defendant. He does so on foot of his grounding affidavit sworn the 29th March 2004 and on the basis that since the incident which gave rise to the plaintiff’s claim for personal injuries took place on the 12th February 2000, the claim as against him is now statute barred, and that in those circumstances he ought not be required to defend them.

It is relevant to note that when the application to join the applicant was made to the Master it was made by way of Notice of Motion, but the proposed defendants were not notice parties to that application, and therefore were not heard on the application. The plaintiff on the other hand contends that he did not become aware of the fact that the applicant was an appropriate person to join as a defendant in these proceedings until such time as the existing defendants delivered their defence, and in which they disclosed or pleaded for the first time that if (which is denied) the plaintiff suffered any injury, it is due to negligence, breach of duty, or breach of contract on the part of the applicant, and the other added defendant, Michael O’Halloran. That defence was delivered on the 23rd May 2003.

At this stage it is appropriate to put the present application into a factual background.

The plaintiff alleges that on the 12th February 2000 while on the first and second named defendants’ licensed premises as a customer, he was caused to slip and fall from a balcony, as a result of which he sustained personal injuries. He alleges that they failed to take reasonable care for his safety, exposed him to a risk which could have been avoided, maintained a hidden trap and/or danger for him and other members of the public, failed to warn of the danger, failed to adequately light the stairs serving the different levels in the premises, and failed to provide adequate hand-rails.

The applicant, who was one of the parties added to these proceedings by the Order of the Master was the architect who had designed the premises, and against who the first and second named defendants are alleging negligence and breach of duty and breach of contract in and about the design of the premises. The works in question had been carried out in 1998.

In his grounding affidavit the applicant states that the first occasion on which he became aware that he was made aware that a claim was being made against him by the first and second named defendant was when he received from their solicitors a letter dated 21st May 2002, in which they sought an indemnity in the event of the first and second named defendants being found liable, and calling upon him to take over the handling of the claim. The letter went on to indicate that in default of his agreement to do as requested, an application would be made by those defendants to join him as a Third Party. Some further correspondence ensued between those solicitors and the solicitor acting for the applicant up to the end of July 2002. As things transpired, no such application was made to join the applicant as a Third Party, but the plaintiff applied to join him as a defendant on the 4th December 2003, some 3 years and 10 months after the plaintiff’s alleged injury was sustained.

The plaintiff’s solicitor has sworn a replying affidavit which traces the history of the litigation. It also contains a specific averment by that solicitor to the effect that at no time prior to the delivery of the Defence herein was he made aware of the correspondence which took place between the defendants and the applicant and the applicant’s solicitor regarding the possible liability of the applicant, and that therefore the 23rd May 2003 was the earliest date upon which the plaintiff had the requisite knowledge for the purpose of s.2 of the Statute of Limitations (Amendment) Act, 1991 (“the 1991 Act). He also avers that the said knowledge as to the possible involvement of the applicant was not knowledge which the plaintiff might reasonably be expected to have acquired from facts observable by him or ascertainable by him even with the assistance of expert help, as provided for in that section.

Mr Michael O’Sullivan, solicitor for the applicant, has submitted that the affidavit sworn by the plaintiff’s solicitor is insufficient to satisfy this court that the plaintiff was not aware sooner than 23rd May 2003 that the applicant might have a liability in this matter. He says that there has been no reference made in that affidavit to possible correspondence which might have taken place between the plaintiff’s solicitor and the first and second named defendants and in which the possible liability of the applicant was made known. But Counsel for the plaintiff has pointed to the averment to which I have already made reference, namely that by the plaintiff’s solicitor to the effect that that at no time was he or the plaintiff made aware of the correspondence between the defendants’ solicitor and the applicant and his solicitor or the possible involvement of the applicant until that matter was pleaded in the Defence.

Mr O’Sullivan has relied on the judgment of Murphy J. in the Supreme Court (upholding the judgment of Laffoy J. in the High Court) in Allied Irish Coal Supplies Ltd. V. Powell Duffryn International Fuels Ltd. [1998]2 I.R. 519. In the High Court, Laffoy J. held that a co-defendant would not be joined in proceedings where the claim against it would be statute barred. In the Supreme Court, Murphy J. stated at page 533:

“It is a well established rule of practice that a court will not permit a person to be made a defendant in an existing action, at a time when he could rely on the Statute of Limitations as barring the plaintiff from bringing a fresh action against him.”
Counsel for the plaintiff has referred the Court to the judgment of Geoghegan J. in B.V. Kennemerland Groep v. Montgomery and others [2000] ILRM 370, in which, inter alia, it was held that a court will not add a defendant pursuant to O. 15, r.13 of the Rules of the superior Courts “if the action is quite clearly statute barred, but if there is a doubt as to whether the action is statute barred, the court does not have to decide the limitations issue and accede or refuse the application accordingly.”

For the purpose of deciding this appeal from the order of the Master I am satisfied first of all, on the basis of the averment of the plaintiff’s solicitor in his affidavit, that the first occasion on which the plaintiff or that solicitor became aware of the possibility that the applicant herein might need to be joined as a party to these proceedings was on 23rd May 2003 when the Defence was delivered. That being so, it is clear on that basis that the plaintiff can have the benefit of the provisions of s. 2 of the 1991 Act which provides that where the time within which an action in respect of an injury may be brought depends on a person’s date of knowledge, references to that date of knowledge are references to the date on which he first had knowledge.

I am also satisfied that it is not reasonable on the facts known to the court at this time to conclude that the information about the applicant’s possible liability was reasonably ascertainable by the plaintiff for the purposes of s. 2(2) of the Act.

The correct course in my view is to refuse to interfere with the Order made by the Master and allow the pleadings of the added defendants to be closed. Thereafter, when all the issues have been clarified, there can be a preliminary issue heard as to the statute issue raised herein, and it may well be (though I express no conclusion in that regard) that for the purpose of that issue, certain discovery might be sought which might include any correspondence which took place between the plaintiff or the plaintiff’s solicitor or other party on the plaintiff’s behalf, and the first and second defendants or their solicitors regarding the possible involvement of the applicant in the liability for the plaintiff’s injury. But that is the manner in which this particular issue is most fairly determined at this stage, since I am not satisfied on the facts as presently known by me that this case that the claim against the applicant is clearly statute barred given the provisions of the 1991 Act to which I have referred.

I therefore refuse the relief sought by the applicant.

Adamson v North Eastern Health Board [2013] IEHC 191

JUDGMENT of Mr. Justice Hogan delivered on the 19th April, 2013
1. In July, 2003 the plaintiff, Mr. Adamson, issued the present medical negligence proceedings arising from what he maintains were the deficiencies in treatment he received when he presented at Louth County Hospital (“the Hospital”) in the early days of January, 2000. The plaintiff, who at the time was aged 45, contends that the first two defendants failed to provide appropriate clinical care and failed to make a timely or proper diagnosis of an inter-cranial abscess or otherwise to make appropriate arrangements for the plaintiff’s clinical management. It is accordingly alleged that as a result of negligent diagnoses and treatment, Mr. Adamson suffered severe neurological injuries. The second defendant is a consultant physician attached to the hospital.

2. The present application concerns the joinder of the third defendant, Kieran O’Connor, by order made ex parte of this Court (O’Neill J.) on 23rd April, 2012. Mr. O’Connor was, at the material time, a consultant physician employed by the Hospital. Mr. O’Connor now moves this Court to have this ex parte order set aside on the ground that the delay in joining him has been inordinate and inexcusable and, furthermore, that the claim is also statute-barred.

3. One of the difficulties for all the parties is that the reconstruction of the precise sequence of facts on the days in question is, at this remove, no easy task. Allowance must naturally be made for the fact that since this incident Mr. Adamson speech and general recollection have been impaired. Nor could the plaintiff be expected to recall the precise identity of the various clinicians who treated him at the Hospital on the days in question. It is, however, necessary to endeavour to assemble the relevant undisputed facts before examining the relevant legal principles.

4. The plaintiff first presented to the Hospital on 1st January, 2000, suffering from headaches and a swollen face. It appears that influenza and an eye infection was suspected and Mr. Adamson was sent home. Mr. Adamson seems to have encountered difficulties with speech on 2nd January. He attended his general practitioner on the following day, whereupon he was referred immediately to the Hospital’s Accident and Emergency Department. Mr. Adamson was ultimately transferred to Beaumont Hospital in the afternoon of 4th January, 2000, where he underwent emergency surgery to remove pus which was placing pressure on his brain.

5. The Hospital’s clinical notes for the 3rd January, 2000, suggest that Mr. Adamson had woken up that morning unable to speak and that he had felt ill on the previous day. The entry for 8.15pm that evening contains a note to the effect that the treating clinician had discussed the case with Dr. O’Connor. The entry in nursing notes for 5pm on the same day record that Mr. Adamson “appears very ill” and that “Dr. O’Connor [has been] informed”.

6. It is important to stress that the clinical notes were first supplied by the Hospital to the plaintiff’s solicitors in October, 2003 following a request in that behalf in August, 2003. There were further requests for medical records between then and the delivery of the statement of claim in February, 2009. At that point, the plaintiff’s solicitor issued a motion for discovery and in June, 2009 the Hospital supplied the accident and emergency chart for 1st January, 2000, and the nursing notes for 3rd January, 2000.

7. Further requests for discovery were issued by the plaintiff’s solicitors in January, 2011. The object of these requests was to identify the casualty doctor who treated Mr. Adamson on 1st January 2000 and the duty roster for the medical staff at the Accident and Emergency Unit at the Hospital for the period from 1st January, 2000, to the 4th January, 2000.

8. A further affidavit of discovery was sworn on behalf of the Hospital in April, 2011. This affidavit identifies the Duty Registrar who treated Mr. Adamson on 1st January, 2000. The duty roster disclosed by this affidavit suggests that Dr. O’Connor was the consultant physician on duty on 1st, 2nd and 4th January, 2000.

9. The plaintiff’s say that they only learnt directly of Dr. O’Connor’s involvement following the supplemental discovery made in April, 2011. It was at the point they inquired whether the Hospital’s solicitors were representing his interests and whether he would be covered by the Hospital’s clinical indemnity scheme. Upon learning from the Hospital’s solicitors by letter dated 8th June, 2011, that he was not so represented by them and nor was he so indemnified, the plaintiff’s solicitors then applied to have Dr. O’Connor joined. It is only fair to record that the plaintiff’s solicitors had previously canvassed the possibility of joining Dr. O’Connor in August, 2010 in the course of correspondence addressed to Dr. O’Callaghan’s solicitors.
Whether the claim is statute-barred?
10. In considering this general question it is necessary first to bear certain considerations in mind so far as the plaintiff’s case is concerned. It is true that the proceedings are, in one sense, prima facie statute-barred in that they were issued several months after the (then applicable) time limit had expired. Yet there are several extenuating features of the plaintiff’s case. His ability to give instructions has been undoubtedly compromised by his illness. It may also be accepted that his general recall of this events and his ability to articulate what occurred also been diminished – perhaps considerably – as a result.

11. There is equally no doubt but that his legal team have represented him with great diligence and they have sought to explore every relevant dimension of these crucial four days from 1st January to 4th January, 2000. In this respect, the contention which has been advanced that time did not run against the plaintiff either by reason of his disability or by reason of the late discovery of the identity of Dr. O’Connor so that the operation of the Statute of Limitations has been thereby arrested cannot be regarded as insubstantial. The Supreme Court has made it perfectly clear that limitation issues should not properly be raised to defeat the joinder of a new party save where this would be “futile or manifestly ill-founded”: O’Connell v. Building and Allied Trade Union [2012] IESC 36, per MacMenamin J.

12. It is accordingly clear from O’Connell that, save in such clear-cut cases, questions of whether a particular claim is statute-barred should not be resolved in the course of a preliminary motion of this kind where the question of adding a new party is the sole issue under consideration. As MacMenamin J. noted in O’Connell, it would be different, of course, if the Court was hearing a motion directed exclusively to the question of whether the action is, in fact, statute-barred. For these reasons, therefore, it sufficient to say that the question of whether this claim is, in fact, statute-barred is not clear-cut and would be required to be separately adjudicated upon. I would accordingly decline to set aside the joinder of Dr. O’Connor on this specific ground.
Whether the delay in joining Dr. O’Connor has prejudiced his entitlement to a fair hearing
13. In truth, however, the principal issue in this case is not as such whether the claim is statute-barred, but rather whether the delay in joining Dr. O’Connor has appreciably jeopardised his right to secure a fair hearing. Here it is necessary to look at the matter from Dr. O’Connor’s perspective as well as that of Mr. Adamson. Even if it is accepted that no personal blame whatever can be imputed to the plaintiff for these delays, the plain fact of the matter is that the first notice which Dr. O’Connor received of such a joinder was in June 2011, over eleven years since the events giving rise to the present proceedings first occurred.

14. It is not disputed that Dr. O’Connor has no recollection of treating this particular patient. Accordingly, if he were obliged to defend these proceedings, he would be required to rely on the clinical and nursing notes. It appears that he would have been responsible for the patient on 1st January, 2000 as the consultant on duty according to the roster if the plaintiff had been admitted to the ward from the accident and emergency department or, alternatively, if he were called to treat the patient in accident and emergency.

15. There is, however, nothing in these notes to suggest that this was the case on that day. The clinical and nursing notes do both make a passing reference to Dr. O’Connor on 3rd January, 2000, but it is not possible to gauge from these notes the extent – if it at all – he was involved in the active management and treatment of the patient. The plain fact of the matter, nevertheless, is that if Dr. O’Connor were now forced to defend the allegations of personal negligence in these proceedings, he would be obliged to do so in circumstances where through no fault of his, the first notification of this came after eleven years and where he could not realistically be expected to defend the negligence claim on its merits.

16. It might, perhaps, be different if there was objective evidence which would have chronicled his actual involvement in some detail and which allowed for an independent evaluation of the extent to which his clinical performance met appropriate professional standards. There is, however, no such evidence in the present case. Indeed, as we have just noted, it is not even clear that Dr. O’Connor was ever involved in the active treatment or management of Mr. Adamson. All that is known from both the clinical notes and the nursing notes is that in the late afternoon and evening of 3rd January, 2000 Dr. O’Connor was informed of the deterioration in Mr. Adamson’s condition and that the treating clinician – probably a hospital registrar – discussed the case with him, even if this fact is taken to suggest that he was the most senior consultant on duty in the hospital on the evening in question

17. In these circumstances, it is all but impossible to see how Dr. O’Connor could fairly defend the claim on the merits. How could a court properly assess whether Dr. O’Connor had properly examined the patient or reached a correct diagnosis? How could the court possibly evaluate whether Dr. O’Connor had recommended the correct course of treatment in this case? These questions effectively answer themselves and show that an assessment of these questions would amount to be little better than pure conjecture or speculation.

18. Here it must also be observed that allegations of professional negligence impact on the good name of the practitioner concerned, which right is, of course, expressly protected by Article 40.3.2 of the Constitution. Even if the allegations do not attain the level of gravity which was at issue in II v. JJ [2012] IEHC 327 (where the plaintiff had alleged that she had been sexually abused by a sibling over twenty-five years previously), I venture nonetheless to suggest that the principle I articulated in that case equally applies to the present one:

“If the State’s obligation to defend the defendant’s constitutional right to a good name in Article 40.3.2 is to be meaningful, it must in turn imply that the procedures contained and operated in our legal system are framed in such a way such that a claim of this gravity is heard and adjudicated within a reasonable period of time.”
19. In the present case it is accordingly unnecessary to rehearse in any detail much of the voluminous jurisprudence which has attended this topic over the last decade or so. It is, perhaps, sufficient to record that in McBrearty v. North Western Health Board [2010] IESC 27 the Supreme Court confirmed that, in the words of Geoghegan J., there exists a distinct jurisdiction to strike out for undue delay which can be exercised “even in the absence of fault on the part of the plaintiff”.
20. Applying that test here, it is manifest that at this remove it would be grossly unfair to expect Dr. O’Connor to defend these proceedings on the merits and it could be all but impossible for a court to arrive at a fair determination of the case based on objective evidence which lends itself to independent scrutiny. This, of course, is no reflection on Mr. Adamson or, for that matter, his legal team, who have plainly striven so hard on his behalf. It is, rather, a recognition of the fact that by reason of the intervening delay over the last decade or so, Dr. O’Connor is simply in no position to address the contention that he did not properly diagnose or treat Mr. Adamson in the manner which has been alleged.

21. In Manning v. Benson & Hedges Ltd. [2004] 3 IR 556, 568 Finlay Geoghegan J. observed:

“The constitutional requirement [in Article 34.1] that the courts administer justice requires that the courts be capable of conducting a fair trial….Accordingly, if a defendant can on the facts establish that having regard to the lapse of time for which he is not to blame there is a real and serious risk of an unfair trial then he may be entitled to an order to dismiss.”
22. As I have indicated, Dr. O’Connor is certainly not to blame for the fact that the lapse of time has greatly complicated the ability of the legal system to provide a hair hearing of the claim against him, since, as we have seen, he was first notified of the fact that he might be joined in the proceedings more than eleven years after the events giving rise to the present action. The risk of an unfair hearing is, moreover, an acute one so far as the claim against him is concerned.
Conclusions
23. It remains to summarise my principal conclusions:

A. The allegations of professional negligence against Dr. O’Connor have the potential to impact on his professional reputation, and, hence, his constitutionally protected good name.
B. The protection of that good name demands that a claim of this nature is heard and determined within a reasonable period of time.

C. It is clear from the Supreme Court’s decision in McBrearty that the court retains an inherent jurisdiction to strike out for undue delay, irrespective of the fault of either party.

D. In the present case, the passage of time has greatly hampered the capacity of Dr. O’Connor to defend the case on the merits. He has no recollection of treating the patient and he would then be forced to rely on two passing references to him in the clinical and nursing notes respectively to assist him in determining his defence.

E. In these circumstances, a fair trial would be all but impossible and no fair conclusion could be reached on whether he had (or had not) met appropriate professional standards.

F. As the passage of time has also accordingly compromised the ability of this Court to discharge its constitutional mandate of administering justice and has equally violated Dr. O’Connor’s concomitant constitutional right to have a case impacting upon his good name tried and determined within a reasonable time, the Court is left within no option but to set aside the order joining Dr. O’Connor as a party to these proceedings.

Kinlon v Córas Iompair Éireann

, [2006] 1 I.L.R.M. 22

Judgment O’Neill J. delivered the 18th day of March, 2005.

In this Notice of Motion the relief sought by the plaintiff is as follows:

1. An order setting aside the Order of the Master of this Honourable Court made on 5th day of February, 2004 and perfected on the 10th day of March, 2004, which said order refused to substitute Bus Átha Cliath for Córas Iompair Eireann.
2. An Order substituting Bus Átha Cliath for Córas Iompair Eireann in the above entitled proceedings.
3. An order extending the Statute of Limitations period.
4. An order extending the time for an appeal of the Order of the Master of this Honourable Court made on 5th day of February, 2004 and perfected on 10th March, 2004.
When this matter came before me on 7th March, 2005, I initially heard the application for an extension of time for an appeal from the Order of the Master and having heard submissions from counsel for the plaintiff and Mr. O’Herlihy for the defendant and having considered the affidavits and exhibits I allowed an extension of time as sought. I then proceeded with the application for the other reliefs set out above.

BACKGROUND

The plaintiff in this case, it is alleged was injured in a road traffic accident which took place on 1st August, 1997, at Arran Quay in the City of Dublin when it is alleged she was struck by a bus while riding her bicycle.

Arising out of this the plaintiff sought to make a claim for negligence in respect of personal injuries suffered in this accident. The plaintiff instructed a firm of Accident Claims Consultants known as Aaron and Carroll. This firm wrote a letter dated 2nd September, 1997 in the following terms:

“Córas Iompair Eireann,

Dublin Bus Claims Dept.,

Bridgewater House,

Islandbridge,

Dublin 8.

2 September, 1997

Your Ref:

Our Ref: 1897LK

RE: Our Client : Lynne Kinlon

Accident : 1 August 1997 at 2.30 pm

Bus Reg.No. : 96 D 313

Dear Sirs,

We act on behalf of Lynne Kinlon, who was involved in an accident on the above said date along the Liffey Quays travelling from Phoenix Park when she was a pedal cyclist.
As a result of this accident, out client suffered severe personal injuries, loss and damage and it appears from our instructions that she is entitled to claim for damages against you arising out of the negligence/nuisance on the part of you, your servants or agents in or about the care, control and driving of Bus Registration Number 96 D 313.
In those circumstances we hereby intimate a claim on behalf of our client.
We await hearing from you.

Yours faithfully,
______________________
Aaran and Carroll & Co.”
A letter of the 16th September, 1997 replied to this letter and the entire text of this letter is as follows:

“Córas Iompair Éireann

Arran & Carroll, Group Investigations Dept.

564 South Circular Road, Bridgewater Business Centre,

Rialto, Islandbridge,

Dublin 8. Dublin 8.

Fax: 703 1554

WITHOUT PREJUDICE Tel: 703 1547

W 197/4383/001/LD Refer Enquiries to:

16th September 1997 ALICE CLARKE

Your Client: Lynne Kinlon
Accident: 1st August, 1997

Dear Sirs,

I acknowledge receipt of your letter of the 2nd September, 1997 and note that you act on behalf of the abovenamed in her/his claim for damages arising herein.
The full circumstances of this accident are being investigated and when I have completed my enquiries I shall reply to you conclusively.
To enable me to complete my investigations please advise:-
1) The time of the accident?
2) The direction and registration number of our bus?
3) The negligence alleged against Bus Atha Cliath/Dublin Bus?
4) Did your client report the accident to the Driver/Conductor, if so can your client give a physical description of the Bus Driver/Conductor?
5) Can we have sight of bus ticket?
6) Where exactly did this accident occur?
7) Advise names and addresses of any witnesses to the accident?
8) Advise the name and address of your client’s Doctor so that I can arrange a joint medical examination under the usual terms?
9) Please forward estimate for repairs to your client’s vehicle?
I look forward to hearing from you.
Yours faithfully,
Denise Gibbons
For Liability Manager/DG.”
Towards the end of July in the year 2000 the plaintiff was informed by this firm of accident consultants that they were unable to negotiate a settlement of her claim and as they were not solicitors they could not issue proceedings on her behalf and as the expiry of the statute of limitations period was approaching, that he was advised to go to a solicitor to initiate proceedings. She instructed Robert Walsh a solicitor to act on her behalf and a Plenary Summons was issued on 26th July, 2000. This Plenary Summons named Córas Iompair Éireann as the defendant. Prior to the issuance of this summons Mr. Walsh had been furnished with some papers which included the letter of 16th September, 1997, quoted above.

As a result of a reliance upon this letter Mr. Walsh deposes on affidavit that “a bona fide mistake in issuing proceedings against Córas Iompair Éireann, was made, not withstanding a reference to Bus Átha Cliath/Dublin Bus in one of the unticked paragraphs in that letter.”

The Plenary Summons was served by way of a letter dated 5th October, 2000 which was addressed to the Secretary of Bus Átha Cliath at its office at O’Connell St. Dublin 1.

This letter is in the following terms:

“Re: Lynne Kinlon v. Bus Atha Cliath – Dublin Bus.

Dear Madam,

We enclose herewith by way of service Plenary Summons.

We would advise, you forward this immediately to your solicitor.

Yours faithfully,

______________________

Robert Walsh & Company.”

In paragraph 7 of his affidavit Gerard O’Herlihy the solicitor for the defendants deposes that this letter of the 5th October, 2000, was not received until the 17th October, 2000.

The first letter from the solicitors for the defendants dated 25th October, 2000, is in the following terms:

“Re: The High Court Lynne Kinlon v. Córas Iompair Éireann

Dear Sirs,

The above entitled proceedings have been passed to us for our attention in respect of this matter.
We note that proceedings are being issued against Córas Iompair Eireann. We would ask you to please note that these proceedings were issued as against the incorrect defendant. The appropriate defendant in this matter is Bus Átha Cliath/Dublin Bus having its registered office at 59 Upper O’Connell St. Dublin 1.
Indeed you will note from our client’s letter of 16th September, 1997 addressed to Aaran and Carroll that there is, indeed, reference to Bus Átha Cliath/Dublin Bus.
Your letter of 5th October, 2000 is addressed to the secretary of Bus Átha Cliath/Dublin Bus. Notwithstanding this your proceedings appear to be served on Córas Iompair Eireann.
As you have clearly issued proceedings as against the incorrect defendant we would be very grateful if you would indicate how you wish to deal with the matter.
It would appear to us that the appropriate manner to proceed is to discontinue the proceedings already issued and issue fresh proceedings herein.
We look forward to hearing from you once you have had an opportunity to consider your position.
Yours faithfully.
_________________
M. Roche & Co.”
No reply was received to this letter and a reminder was sent by M. Roche and Co. dated 7th February, 2001.

The next letter in the correspondence was a letter of the 11th June, 2001 from Hughes Murphy Walsh and Co. Solicitors now acting for the plaintiff, enclosing the Statement of Claim. This was replied to by way of letter of 12th June, 2001 from M. Roche & Co. for the defendants which inter alia stated:

“For the record we enclose herewith a copy of our letter dated 25th October, 2000. We did not receive a reply to that letter and we sent a further reminder dated 7th February. That letter was not replied to either.
At the moment we have not entered an appearance on behalf of Córas Iompair Eireann as we have been waiting for you to respond to our letter of 25th October.
If you do wish us to enter an appearance we confirm that we will so enter an appearance on the basis that the plaintiff is clearly aware of the fact that she has issued proceedings as against the incorrect defendant and that we will be defending the matter on those grounds.
We would again call upon you to clarify the plaintiff’s position in respect of these proceedings.
Are we correct in understanding that the plaintiff does not intend to discontinue the present proceedings and to issue proceedings as against the correct defendant…”.
Reminders were sent by M. Roche and Co. dated 12th July, 2001 and 10th September, 2001. A letter dated 25th October, 2001, from Hughes Murphy and Walsh Company stated the following:

“Further to ours of 6th October, 2000 enclosing Plenary Summons entitled as above, we note that to date we have not received your appearance.
We hereby put you on notice that should we fail to receive your appearance within a period of 21 days from the date hereof, a Notice of Motion and default will issue immediately thereafter.”
This letter was addressed to C.I.E., Group Investigation Department, Bridgewater Business Centre, Islandbridge,. Dublin 8.

This letter was responded to by letter dated 5th November, 2001, from M. Roche and Co. in which the following was said:

“We are somewhat surprised that you would corresponded directly with C.I.E. when you are perfectly aware that we act on behalf of Dublin Bus. We have written to you on 12th June; 12th July, and 10th September, and you have ignored all of those letters.
For the record we again enclose herewith a copy of our letter dated 25th October, 2000 addressed to Robert Walsh & Company. We also enclose herewith a copy of our letter dated 12th June, 2001 which you ignored.
Please correspond directly with us in future in relation to this case and please respond to our correspondence.”
A further reminder dated 6th December, 2001, was sent by M. Roche and Co. to the solicitors for the plaintiffs.

The next letter in the correspondence is dated the 8th August, 2002 and is from the solicitors for the plaintiff to M. Roche and Co. and it is in the following terms:

“We now enclose our Statement of Claim for your attention”.

This was replied to by way of a letter of 5th September, 2002, from Mr. Roche and Co. which inter alia says:

“We would be very grateful if you could indicate why you have served another Statement of Claim upon us in this case. It seems to be identical to the Statement of Claim delivered 11th June, 2001.
To date we have written the following letters both to you and to Robert Walsh & Company related to the incorrect defendant herein:-
1. Letter to Robert Walsh and Co. dated 25th October, 2000.
2. Reminder letter to Robert Walsh and Co. dated 7th February, 2001.
3. Letter to Hughes Murphy Walsh and Co. dated 12th June, 2001.
4. Reminder letter to Hughes Murphy Walsh and Co. dated 12th July, 2001.
5. Reminder letter to Hughes Murphy Walsh and Co. dated 10th December, 2001.
6. Letter to Hughes Murphy Walsh and Co. dated 5th November, 2001.
7. Reminder letter to Hughes Murphy Walsh and Co. dated 6th December, 2001.
We are entirely at a loss as to what more we can do in this case.
This letter is to once more confirm that you have issued proceedings as against the incorrect defendant. The correct defendant is, and has always been Bus Átha Cliath/Dublin Bus.
We have not as yet, entered an appearance on behalf of the defendant as we have been enquiring over all of the above mentioned letters as to what you intend to do about the fact that you have sued the incorrect defendant.”
The next letter in the correspondence is one of the 26th December, 2002 from M. Roche & Company to solicitors for the plaintiffs in which the following is said:

“Further to my recent telephone conversation with your Mr. O’Neill, I now enclose herewith Notice of Entry of an appearance on behalf of Córas Iompair Eireann.
I note that it is agreed that this appearance has been entered on the strict understanding that it will be the defendants defence in this case and that the nominated defendant in these proceedings is incorrect.
Without prejudice to the foregoing, we enclose herewith Notice for Particulars for your attention.”
Thereafter on 18th December, 2002, a defence was delivered on behalf of Córas Iompair Eireann the first paragraph with which is as follows:

“1. The defendant is not the owner of nor did this defendant manage or control the motor bus, the subject matter of these proceedings and in the premises this defendant has no liability to the plaintiff in respect of the care, driving management or control of the said motor bus.”
The next letter in the correspondence is one of the 14th May, 2003 from the solicitors for the plaintiff to the solicitor for the defendants and it is in the following terms:-

“We note from your defence delivered on 18th December, 2002 that paragraph 1 alleges that Córas Iompair Eireann is not the correct defendant.
At the commencement of the hearing of the action an application will be made on behalf of the plaintiff to substitute Bus Átha Cliath/Dublin Bus for Córas Iompair Eireann as the defendant. We note from pervious correspondence that from an early stage the Group Investigations Department carried out investigations in relation to this claim and in the premises no prejudice can be suffered as a result of the said Substitution Application.
Please confirm within 21 days from the date hereof that you will consent to the said Application. If no such consent is received within 21 days a Motion for the said Substitution will be brought and this letter will be replied upon for the costs of the said Motion.”
This letter was replied to by a letter of 30th June, 2003 from the solicitors for the defendant to the solicitor for the plaintiff in the following terms:

“We are most surprised at the contents of your letter of 14th May.
We took the liberty of writing to you in relation to this matter on 7th February, 2001; the 12th June, 2001; 12th July, 2001; 10th September, 2001; 5th November, 2001; 6th December, 2001; and 5th December, 2002.
You specifically chose to ignore each and every one of those letters.

In the light of the foregoing please note that we are instructed not to consent the proceedings being amended and we intend to use this and copies of all of the correspondence which you previously ignored in evidence should you issue a Notice of Motion in respect of this matter.”
Therafter a notice of motion dated 12th December, 2003 was issued, in which the primary relief claimed was:-

“An order substituting Bus Átha Cliath/Dublin Bus, having its registered office at 59 Upper O’Connell St. Dublin 1 as defendant for Córas Iompair Eireann.”
This application came on for hearing before the Master of the High Court on 5th February, 2004, when the Master refused the relief claimed.

For the appellant in this appeal it was submitted that the true identity of the defendant was always apparent and that what occurred was a bona fide mistake as to the description of the defendant not as to its identity. It was submitted, that, at all times, this was well known to the plaintiff and the defendant and the mistake was contributed to by the defendants in its letter of 16th September, 1997.

It was submitted that in these circumstances in order to do justice between the parties it was appropriate that Bus Átha Cliath be substituted for Córas Iompair Éireann and in this regard counsel for the appellant relied upon the judgment of Shanley J. in Southern Mineral Oil Limited (In liquidation) v. Cooney (No. 2) [1999] 1 IR 237 and in particular the following passage from the judgment of Shanley J. at page 246 of the report as follows:

“As to O. 15, r. 2, of the Rules of the Superior Courts there is a similar, but not identical, rule in the English Rules of the Supreme Court; O. 20, r. 5(1), (2) and (3) provide as follows:-
‘(1) Subject to Order 15, rules 6, 7 and 8 and the following provisions of this rule, the court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct.
(2) Where an application to the court for leave to make an amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so.
(3) An amendment to correct the name of a party may be allowed under paragraph (2), notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued.”
The effect of these rules was considered in the English case of Evans Ltd. v. Charrington & Co. Ltd. [1983] Q.B. 810, where Donaldson L.J., in the Court of Appeal said at p. 821:-
‘In applying O. 20, r. 5(3), it is in my judgment important to bear in mind that there is a real distinction between suing A in the mistaken belief that A is the party who is responsible for the matters complained of, and seeking to sue B, but mistakenly describing or naming him as A and thereby ending up suing A instead of B.
The rule is designed to correct the latter and not the former category of mistake. Which category is involved in any particular case depends upon the intentions of the person making the mistake and they have to be determined on the evidence in the light of all the surrounding circumstances.’
In the more recent case of Re: Probe Data Systems [1989] B.C.L.C. 561, the Secretary of State for Trade and Industry in England and Wales applied to the court under the Rules of the Superior Courts, O. 20, r. 5(3) for leave to amend an originating summons to substitute himself as applicant instead of the official receiver. Millet J., refusing the application, said at p. 563:-
‘At first sight it may appear that in order to substitute a new plaintiff there are only two requirements which must be satisfied. First, that the mistake sought to be corrected was a genuine mistake; and second, that it was not misleading or such as to cause any reasonable doubt as to the identity of the intended plaintiff. That is not the case, for not every mistake can be corrected by amendment under O. 20, r. 5(3). The mistake must have been a mistake as to the name or identity of the intended party’.”
It is quite clear that the appellant’s reliance on this part of the judgment of Shanley J. and in particular the reliance placed upon O. 20 r. 5(3) of the English Rules of the Supreme Court is misplaced.

Firstly, O. 15 r. 2 of the Rules of the Superior Courts deals only with the substitution of plaintiffs. The addition or deletion of a defendant falls to be dealt with under O. 15 r. 13.

Secondly the rules of the Superior Courts do not contain a provision similar to O.20 r. 5(2) and (3). The effect of these two sub-rules taken together is that where a mistake occurs such as can be catered for under O. 20 r. 5(3), an amendment can be permitted notwithstanding that the relevant period of limitation from the date of issue of the writ has expired. There is nothing in the Rules of the Superior Court that would permit that to be done.

In the absence of a provision in the Rules of the Superior Courts, similar to O. 20 Rs. 5(2)(3) of the English rules, there is no jurisdiction, to cater for a mistake of the kind that is catered for in the English rules, and which the appellant contends is the kind of mistake that has occurred in this case. Hence, the fact that the mistake was a bona fide mistake, or that there was no mistake as to the identity of the correct defendant, and that the mistake only concerned, the correct description of the correct defendant, and that C.I.E. or Bus Átha Cliath, are not prejudiced, are all irrelevant considerations. The rules, simply do not create a jurisdiction to correct the mistake by the substitution sought.

The problem that arises in this case is that the Statute of Limitation period of three years expired on the 1st August, 1997. The Plenary Summons issued in this case names only Córas Iompair Éireann as defendant. Apart from this named defendant, the Statute of Limitation expired on the first day of August, in the year 2000 insofar as any other potential defendant is concerned.

The issue which then necessarily arises on this appeal is whether or not this court should permit the joining of Bus Átha Cliath to the proceeding in circumstances where it would appear, that Bus Átha Cliath can avail of a defence, which would bar the action under the Statute of Limitations Act 1957 as amended.

In this regard Mr. Herlihy for the defendant relies upon the following passage from the judgment of Shanley J. in the case of Southern Mineral Oil Limited (In Liquidation) v. Cooney (No. 2) where the learned judge said as follows at page 245 to 246:-

“The attitude of the Supreme Court, as expressed in 1971, by Ó Dálaigh C.J. and Budd J. in O’Reilly v. Granville [1971] I.R. 90 (that the statute was a matter of defence and does not arise until pleaded), to applications to join parties to proceedings has changed somewhat as can be seen from the decision of the present Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn Intl. Fuels Ltd. [1998] 2 IR 519. In that case, Murphy J. delivered a judgment (with which Lynch and Barron JJ. concurred). One of the matters in issue was an application by the plaintiff to add a party as a defendant. The trial judge had refused to add the party as a defendant and the Supreme Court affirmed that decision. Murphy J. said at p. 533 of his judgment:-
‘It is a well established rule of practice that a court will not permit a person to be made a defendant in an existing action at a time when he could rely on the Statute of Limitations as barring the plaintiff from bringing a fresh action against him.’
It appears to me that I am bound to follow the later decision of the Supreme Court in Allied Irish Coal Supplies Ltd.”
Mr. O’Herlihy submitted that relying upon the foregoing that it was the established practice not to permit party to be added once the statute of limitation had expired and he indicated that if joined Bus Átha Cliath would seek to avail of the defence provided by the Statute of Limitations.

I find myself in considerable difficulty in relation to the question posed above because of what would appear to me to be a conflict of authority on the topic.

In his judgment in Southern Mineral Oil Limited Shanley J. expressed the view that he was bound to follow the later decision of the Supreme Court in Allied Irish Coal Supplies Limited, in preference to the judgments of the Supreme Court in O’Reilly v. Granville. I find myself with great regret unable to agree with Shanley J. on this point.

In Allied Irish Coal Supplies Limited, the case of O’Reilly v. Granville, does not appear to have been cited either to the High Court or to the Supreme Court. As the leading authority on this point up to that time, the Supreme Court could not have reached a different conclusion without express disapproval of O’Reilly v. Granville and in any event it is difficult to see how either the High Court or the Supreme Court could have concluded that, “It is a well established rule of practice that a court will not permit a person to be made a defendant in an existing action at a time when he could rely on the Statue of Limitations as barring the plaintiff and bringing a fresh action against him” when in fact the leading judgments of the Supreme Court then, were diametrically opposed to that view, that view having been canvassed in O’Reilly v. Granville and rejected by the majority of the court, unless O’Reilly v. Granville was not cited to either Court.

It would appear to me that since O’Reilly v. Granville does not appear to have been considered by the Supreme Court in Allied Irish Coal Supplies Ltd. and expressly disapproved, that it remains good law and insofar as I find myself with two conflicting Supreme Court authorities I am inclined to prefer the reasoning of O’Reilly v. Granville.

In that case O’Dálaigh C.J. concluded that this court should not refuse to add a defendant to proceedings simply because the defence of the Statute of Limitations would have been available to that defendant on the grounds that, firstly, the court should not assume that a defendant would avail of that defence, secondly that the defence could only be raised by pleading and thirdly in an application to join a defendant the court could not determine in advance whether or not that defence would be successful. Budd J. agreed with O’Dálaigh C.J. but added that if it was apparent beyond doubt that the defence of the Statute was available to the proposed defendant the adding of the defendant would be futile and might very well be refused.

Walsh J. disagreed with the majority on one essential point. O’Dálaigh C.J. and Budd J. concluded that both as a matter of substantial law and also by virtue of the concluding sentence of O. 15 r. 13, an added party could not be considered to be a party to the proceedings earlier than the order giving leave to add. Walsh J. was of the opinion that the addition of the party as a defendant had the effect of deeming that party to have been a party to the proceedings from the time the writ was initially issued, thereby having the effect of eliminating a defence under the Statute of Limitations that might have been available to that added defendant, and hence, to avoid that injustice a proposed defendant who could avail of the statute should not be added. Whilst accepting this proposition, which had been urged on the court by counsel for the defendant relying upon the established English line of authority going back to the case of Mabrob v. Eagle Star and British Dominion Insurance Company [1932] 1 K.B. 485, Walsh J. nonetheless concluded that if the judge were to take the view that justice would be served by the addition of the party that he should be added even though this effectively deprived him of the benefit of the Statute of Limitations. He arrived at that conclusion on the basis that the Statute of Limitations did not exist for the purpose of aiding unconscionable and dishonest conduct.

The source for the proposition to which expression was given by Murphy J. in Allied Irish Coals Limited to the effect that “It is a well established rule of practice that a court will not permit a person to be made a defendant in an existing action, at a time when he could rely on the Statute of Limitations as barring the plaintiff from bringing a fresh action against him”, is the English line of authority which appears to derive from the Mabro case and was considered in the two cases referred to by Murphy J. in Allied Irish Coal Supplies Limited namely Liff v. Peasley [1980] 1 W.L.R. 781 and Ketteman v. Hansel Properties Ltd. Limited [1987] A.C. 189. In both of these cases the Court of Appeal and subsequently, in the latter case, the House of Lords had to consider the origin of the established rule of practice as aforesaid. Two theoretical base were considered; namely what was described as the “relation back” theory and the “no useful purpose” theory.

The former of these theories, was to the effect that when a party was added as a defendant, his joining to the proceedings was related back to the time of the issue of the writ with the consequence of perhaps eliminating a defence under the Statute of Limitations. The latter theory was based on the view that if the time of involvement in the proceeding started with the joining of the additional defendant then the party joined could avail of his defence under the Statute of Limitations and hence no useful purpose would be served in joining him.

The House of Lords emphatically, in Ketteman v. Hansel Properties Ltd. rejected the “relation back” theory as the basis of the rule holding that a person added as a defendant did not become a party until the writ had been served on him and that in computing the period of limitation, the date of joinder was not to be related back to the date when the original writ was issued and thus time only ceased to run from the actual date of joinder. It was further held by a majority of 3 to 2 that a plea of limitation was a procedural defence and had to be pleaded.

In the light of the judgments of the House of Lords in the Ketteman case it is hard to see how the practice could be described thereafter as an established practice.

In my view the only basis upon which a practice of this kind could be said to be an established practice would on the basis of the so-called “relation back” theory. If it was the law that when a party was joined as an additional defendant his joinder was deemed to take effect from the date of the original writ, then in circumstances where a defence under the Statute of Limitations might have been available to him it would be right, in order to avoid injustice, for there to be an established practice not to join an additional defendant in these circumstances.

In many cases at the time of the application to join an additional defendant, even though it might be apparent that the limitation period had expired, it would not be known whether the proposed defendant wished to avail of the statutory defence or whether there were circumstances which might estop him from availing of that defence. That being so in a great many cases it could not be said on an application to join an additional defendant that “no useful purpose” would be served by joining that defendant. Hence in my view the concept of “no useful purpose” could not be the basis of established or invariable rule of practice.

Having carefully considered the judgments of the House of Lords in the Ketteman case it would seem to me that there is a considerable convergence between the opinions expressed there and the opinions expressed by O’Dálaigh C.J. and Budd J. in O’Reilly v. Granville. It is of course the case that the judgments in the House of Lords don’t go so far as a complete departure from the “established rule of practice”, but the inevitable consequence of these judgments is that this rule of practice could not continue to operate in an application to join an additional defendant unless at the time that that application is made it is proved that the proposed defendant will avail of a defence under the Statute, and that that defence will in all probability be successful.

I therefore, as said earlier, prefer the reasoning in the judgments of O’Dálaigh J. and Budd J. in O’Reilly v. Granville and indeed it could be said that having regard to the fact that O’Reilly v. Granville does not appear to have been cited to either the High Court or Supreme Court in Allied Irish Coal Supplies Ltd., that it remains good law which I am bound to follow.

In summary therefore I take the law on this topic to be to the following effect:-

1. There is no established rule of practice to the effect, that where a defence under the Statute of Limitations may be available to a proposed defendant that such proposed defendant should not be joined as a defendant in proceedings under O. 15 (13) of the Rules of the Superior Court.
2. The joinder of an additional defendant does not have the effect of deeming that defendant to have been a party to the action form the date of issue of the original writ. An added party cannot be considered to have been a party to the proceedings earlier than the order giving leave to add. Therefore there is nothing in the Rules of the Superior Courts or in substantive law which would restrict an added defendants right to rely on a defence under the Statute of Limitations, i.e., an added defendants right to plead the Statute cannot be adversely affected, by his being joined to the action.
3. A defence under the Statute of Limitations must in every case be pleaded. [See O. 19 r. 15].
4. A court should not assume that a proposed defendant sought to be joined under the O. 15 (13) would avail of a defence under the Statute of Limitations.
5. The court in an application under O. 15 (13) to join an additional defendant should not attempt to determine in advance that a potential defence under the Statute of Limitations Act will be successful.
In light of the above conclusions, it follows that I must make the order sought, joining Bus Átha Cliath as a defendant to this action.

It would be inappropriate for me to express any view on any potential defence; that might be raised by pleading by Bus Átha Cliath.

Approved: O’Neill J.

Stapleford Finance Ltd v Lavelle

[2016] IEHC 385

JUDGMENT of Ms. Justice Baker delivered on the 6th day of July, 2016.
1. The plaintiff seeks summary judgment against the defendant in the sum of close to €6 million, the precise amount of which will appear below. The defendant seeks to defend and claims that he has established sufficient argument and evidence to satisfy the tests established in the authorities such that the matter ought to be remitted to plenary hearing.

2. I already gave judgment in an application by the plaintiff to be substituted as plaintiff in lieu of IBRC in Irish Bank Resolution Corporation Limited (in special liquidation) v. Lavelle [2015] IEHC 321, affirmed on appeal by the Court of Appeal in Stapleford Finance Limited (as substituted) v. Lavelle [2016] IECA 104.

3. The motion for summary judgment is grounded on affidavits of Ruth Molphy and Jonathan Hanly, Mr. Lavelle swore a replying affidavit on 29th July, 2015, and Jonathan Hanly replied to that affidavit on 6th November, 2015.

4. The claim is made in respect of seven loans advanced to the defendant by five separate facility letters from Anglo Irish Bank (“Anglo”) between 2nd June, 2006 and 14th December, 2007.

5. The defendant was employed as a trader in the City of London for 11 years and in the course of this time accumulated considerable wealth and held a sum of approximately €9 million on deposit with Anglo Irish Bank in a branch or branches in the Isle of Man. The defendant returned to live in Ireland with an intention to settle here sometime in 2005 and continued to be employed in the City, working mainly online. He established a relationship with Anglo Irish Bank, and in May 2006 obtained approval for a short-term bridging facility to fund a deposit for a house purchase. That loan facility was not drawn down.

6. The defendant conducted his personal banking with Anglo and Anglo’s Wealth Management Division acted as his financial advisor. In the context of his wish to diversify his savings and put in place pension type investments to secure his and his family’s future, he sought advice from Anglo Wealth Management and was introduced to Quinlan Private through which he invested in a number of commercial transactions promoted by that private investment fund. Based on tax advice he continued to retain a substantial cash fund on deposit with Anglo in the Isle of Man which he intended to keep there until he became ordinarily resident in Ireland in January, 2008. It was for that reason that, instead of directly investing his own funds, he borrowed monies from Anglo to fund certain investments as will appear below.

7. By the first facility letter dated 2nd June, 2006, Anglo offered to lend to the defendant the sum of €750,000 for the stated purpose of enabling the defendant to part fund an investment in the Mall of Sofia Shopping Centre, Sofia, Bulgaria, described as a Quinlan Private promoted investment. The loan was secured on the intended investment in the shopping centre, as well as on two equity funds of the borrower. The facility was a demand facility subject to repayment in full on or before 30th June, 2007. The defendant signed acceptance of this loan facility on 2nd June, 2006 and the monies were drawn down.

8. By the second facility letter dated 23rd August, 2006, Anglo offered to lend to the defendant the sum of €1 million for the stated purpose of fully funding an investment in the Baggot Street co-ownership, described as a Quinlan Private promoted investment. The loan was secured on the borrower’s investment in the Mall of Sofia Shopping Centre, the subject matter of the first loan, and on the investment in the Baggot Street co-ownership. The offer was accepted by the defendant in writing on 24th August, 2006.

9. The first and second loan offers were made by documentation in a form suitable for use as a credit agreement regulated by the Consumer Credit Act, 1995.

10. By the third facility letter dated 3rd January, 2007, Anglo offered to lend to the defendant €1.5m stated as being in addition and not in substitution for previous facilities issued by the bank to the borrower, for the express purpose of fully funding an investment in that amount in Neumarkt Galerie, Cologne, Germany, described as a Quinlan Private promoted investment. Security was to be put in place inter alia, over the Sofia and Baggot Street investments. The borrower accepted this facility in writing on 3rd January, 2007.

11. In conjunction with the third facility the defendant executed a certificate that he was not acting as a consumer for the purposes of the Consumer Credit Act 1995, and the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995, and that as the facility was being advanced for the purpose of his trade, business or profession, he was not a consumer within the meaning of the Act or the Regulations. He also confirmed that he understood the effect and importance of the certificate and was advised to take and had been given the opportunity to take separate legal advice. No specific trade or business in which the defendant was engaged was expressly described.

12. By the fourth facility letter dated 9th May, 2007, Anglo offered to lend to the defendant a top up of the third facility in the maximum amount of €220,000 to further fund the Neumarkt Galerie, Cologne investment. This facility was accepted by the borrower in writing on 14th May, 2007, and he executed, on that day, a certificate for the purposes of confirming he was not a consumer in similar terms to that executed for the purposes of the third facility.

13. By the fifth facility letter dated 14th December, 2007, Anglo offered to lend to the defendant the sums of €1,005,000, €755,000 and €1,005,000 (total €2,765,000) for the stated purpose of funding an investment of €1 million in a Quinlan Private Jury’s Hotel deal, €750,000 for investment in four Davy promoted investments and a further €1 million for an Anglo investment to be decided. Security was to be put in place over the intended investments and over the investments the subject matter of the other four facilities. The defendant accepted the offer in writing on 20th December, 2007 and on the same day executed a certificate in identical terms to that executed by him for the purposes of the third and fourth facilities save that the purpose of the facility was identified specifically by reference to the three investment funds or instruments referred to above, and not in the general terms used for the earlier certificates.

14. The plaintiff claims that as of 31st May, 2013 the defendant was indebted to IBRC, which by then by statute had taken an assignment of the assets and liabilities of Anglo, in the aggregate sum of €4,023,047.55 representing principal and interest and by letter of 5th June, 2013 IBRC demanded payment of the entire of the said sum. The defendant made no payment on foot of the demand and the amount said to be owing as of 16th May, 2014 was 5,934,485.75.

15. The defendant does not dispute that he drew down the various amounts offered to be lent by the five facility letters, seven loans in total.

16. He seeks liberty to defend the proceedings and argues that he has established an arguable ground of defence in a number of respects as follows:

a. That the claim of the plaintiff is statute barred because the order by which the current plaintiff was substituted for IBRC was made outside the six year statutory time limit in respect of the institution of claims in contract.
b. That the plaintiff has not adequately established by proof that it has taken an assignment of the chose in action from IBRC such as to entitle it to maintain these proceedings.

c. That he was for the purposes of all loans a consumer within the meaning of the consumer credit legislation and European law, and that the mandatory statutory requirements were not met.

d. That the calculation made by the plaintiff in respect of accrued interest is incorrect.

17. Some grounds of defence raise matters of law, and some of mixed fact and law. I will deal with each asserted ground of defence in turn. First however, I briefly set out the jurisdiction of the court on a motion for summary judgment.
18. In order to be permitted to defend a claim for summary judgment a defendant must make out an arguable defence as explained by the Supreme Court in Aer Rianta c.p.t. v. Ryanair Ltd. [2001] 4 IR 607 and in Harrisrange Ltd. v. Duncan [2003] 4 IR 1, i.e. whether the defendant can show a reasonable probability of having a real or bona fide defence.

19. The courts have found in a number of cases that the determination of a legal question may be made at the stage of summary judgment.

20. In Bank of Ireland v. Educational Building Society [1999] 1 IR 220, Barron J. in one of three concurring judgments in the Supreme Court, said at p. 233:

“When the issue is solely one of law, then the court may determine that issue and give final judgment. Where, however, the court would be in a better position to determine the issue of law after a closer and fuller examination of the facts, the defendant should be given liberty to defend…”
21. In Harrisrange Ltd v. Duncan [2003] 4 IR 1, McKechnie J. said the following at p. 7:
“(v) Where however, there are issues of fact which, in themselves, are material to success or failure, then their resolution is unsuitable for this procedure
(vi) Where there are issues of law, this summary process may be appropriate but only so if it is clear that fuller argument and greater thought is evidently not required for a better determination of such issues.”

22. Clarke J. in Chadwicks Ltd. v. P. Byrne Roofing Ltd. [2005] IEHC 47 referred to different considerations arising in cases where defences are based on contentions of fact as opposed to law. In relation to the latter, he explained at pp. 7-8:
“Where the defence, at least in part, depends on an issue of law then it is a matter for the discretion of the court to determine whether that issue should be tried on the summary motion or remitted for further consideration at plenary hearing dependant, in the main, or whether the issue is sufficiently nett or straightforward to be easily determined within the confines of a summary judgment motion.
Finally it may be observed that the defence may amount to a mixed question of law and fact in which case the court must exercise a judgment as to whether the factual matters in respect of which a credible dispute has been established combined with any legal issues which are not capable of being resolved on a summary judgment motion give rise to a fair or reasonable probability of the defendant having a real or bona fide defence.”

23. In Danske Bank t/a National Irish Bank v. Durkan New Homes & Ors. [2010] IESC 22 Denham J. at para. 20 added the following guidance:
“While a court may resolve questions of law there is no obligation to do so. The test, as stated previously, is whether the appellants have established an arguable defence.”
Clarke J approved that statement in IBRC (in special liquidation) v. McCaughey [2014] IESC 44
Is the claim of Stapleford arguably statute barred?
24. This is an argument that in my view is capable of being determined on a summary motion for judgment and raises a question of pure law.

25. The defendant argues that the claim of Stapleford is statute barred in the following circumstances. Stapleford Finance Limited was substituted as plaintiff in place of IBRC by my order made on 4th June, 2015, affirmed on appeal by the Court of Appeal on 11th April, 2016. It is argued that the present proceedings are a new cause of action which are deemed to commence on the date the substitution order was made.

26. The question of the Statute of Limitations seems to have been argued to some extent in the appeal before the Court of Appeal, and Costello J. in her judgment at para. 23, recites the submission of counsel for Mr. Lavelle that as a matter of law it was possible to assign a chose in action but not an existing cause of action, and that following the assignment of a chose in action an assignee must start new proceedings. At para. 27 of her judgment, Costello J. pointed to the “startling gravity of the implications” of that argument, but did not need to expressly decide the point.

27. The argument in the present case engages a consideration of the effect of an order substituting a party in proceedings, when what is relied on is an assignment of a cause of action by IBRC pursuant to s. 12 of the Irish Bank Resolution Corporation Act, 2013 by which the now plaintiff took an assignment of the interest of Anglo/IBRC from its special liquidators. Section 12(2) of the Act provides that on the sale or transfer of any cause of action:

(2) On the sale or transfer of any cause of action or proceedings by IBRC, acting through a special liquidator, or by a special liquidator where such cause of action has, or proceedings have, vested in the special liquidator, to any person—
(a) that person assumes all of the rights and obligations in relation to the cause of action or proceedings which IBRC had immediately before that sale or transfer, other than the obligations of IBRC to which paragraph (b) relates,”

28. As Costello J. said in her judgment in the Court of Appeal in reference to the argument that IBRC could not as a matter of law assign an existing action:
“The legislative intent of s. 12 will likewise be defeated the Rules of the Superior Courts do not permit the purchaser of the “cause of action or proceedings” to be substituted as plaintiff in those proceedings.” (para. 22)
29. She also referred in her judgment to the provisions of the Supreme Court of Judicature (Ireland) Act 1877 and the provisions of O. 17, r. 4 of the Rules of the Superior Courts as the basis of the power to assign.
30. I consider that the provisions of s. 12(2) of the Act of 2013 are clear and as a result of a sale by the special liquidators pursuant to that statutory power, as a matter of law there occurred an assumption of the rights and obligations in the cause of action or proceedings which IBRC had immediately before that sale or transfer.

31. The matter was considered in the more broad context by the Court of Appeal of England and Wales in Yorkshire Regional Health Authority v. Fairclough Building Limited [1996] 1 W.L.R. 210. Costello J. giving the judgment of the Court of Appeal in the substitution application quoted from a dicta at p. 215 of the judgment of Millett L.J. in which he refers to the historical evolution in that jurisdiction of the power to transmit or devolve a cause of action. Later in the judgment, in a paragraph not quoted by Costello J., Millett L.J. said the following by reference to Ord. 15, r. 7 of the then applicable Rules of Court:

“Ord. 15, r. 7 does not contain, and none of its predecessors ever has contained, any reference to limitation. This is as it should be, since the circumstances in which the rule may be invoked do not give rise to any question of limitation. Even though the rule permits a new party to be substituted for an original party, this does not involve a new cause of action; the new party is substituted because he has succeeded to a claim or liability already represented in the action and sues or is sued in respect of the existing cause of action. The substitution of the successor does not deprive the defendant of an accrued limitation defence. There is no good reason why the substitution should not be made at any stage of the proceedings and whether a relevant period of limitation has expired or not; the expiry of the limitation period is completely irrelevant.”
32. I adopt this statement of principle from the judgment of Millett L.J., and consider that the defendant is incorrect in his argument that the cause of action now subsisting is a fresh cause of action in respect of which he has an arguable defence under the Statute of Limitations. Stapleford has taken an assignment of the various rights of IBRC, and those rights included the present existing cause of action. In taking that assignment, Stapleford stepped into the shoes of IBRC for all purposes related to this cause of action and took the benefit and burden of these proceedings, including the burden for example of any pleas in defence then existing. The assignee is not in a better position than the assignor of the chose in action, but equally cannot be said to be put in a worse position.
33. The Court of Appeal in its decision in the substitution application also quoted from the decision of Mance J. in the English High Court in Industrie Chimiche, Italia Centrale and Another v. Alexander G. Tsavliris & Sons Maritime Co. & Anor. [1996] 1 W.L.R. 774, (at p. 782) as follows:-

“In all situations, of which death is only the most striking it seems self evident both that any existing proceedings, properly constituted within the limitation period, should be allowed to continue for or against the party to whom the relevant right or obligation has been transferred in law; and this should be permitted whether the transfer occurs before or after the expiry of the limitation period.”
34. Costello J. referred to that decision of Mance J. more by way of authority for the proposition that the power to substitute a plaintiff existed before the enactment in England and Wales of the Supreme Court of the Judicature Acts in 1875, but it is a useful statement of law as to the effect of an assignment of a cause of action.
35. My view is that the defendant has no arguable grounds to advance the argument that once Stapleford acquired by assignment the chose in action comprising, inter alia, the existing cause of action against Mr. Lavelle, a new action was required to be commenced, or was deemed thereby to come into existence. I consider that the transfer by virtue of s. 12 had the effect, as a matter of law that Stapleford assumed all the rights and obligations in relation to the cause of action and the proceedings already commenced by IBRC in this case. As no argument is being made that those proceedings were statute barred, and as the benefit of the proceedings is now vested in Stapleford, the argument that the cause of action is now statute barred seems to me, to be tantamount to arguing that the cause of action is an a different one from that already commenced by IBRC. On the transfer to Stapleford of the IBRC debt, the action did not thereby become extinguished, but was capable of being continued by the person to whom it had been assigned.

36. I reject that argument that defendant is entitled to defend the proceedings on this ground.
Proof of assignment to Stapleford
37. The defendant argues that the plaintiff has not put before the court sufficient evidence to establish it is the successor in title of IBRC for the purposes of the proceedings. After some argument it was, in principle, accepted by counsel for the plaintiff that the fact that the substitution order was made by me on the interlocutory application and affirmed on appeal by the Court of Appeal does not, of itself, prevent a defendant from requiring proof of assignment.

38. The evidence before me is that on or about 28th March, 2014, IBRC acting through its special liquidators entered into an agreement with Stapleford for the absolute transfer, transmission and assignment to it of its rights in the facilities, the subject matter of these proceedings. The document described as a “loan sale deed” was exhibited and while it is described as a deed, it is, in substance, an agreement to sell to Stapleford the assets therein set out.

39. The documents exhibited contains a significant number of redactions but do identify to my satisfaction loan accounts of the defendant as part of the list of assets or borrowers in respect of which the agreement was made. The agreement was performed by the execution of a deed of transfer on 23rd May, 2014, by which the assets were assigned to Stapleford.

40. I am satisfied as to the proofs and the affidavit evidence is in conformity with O. 37 R1 as explained by the Supreme Court in Ulster Bank Ireland Ltd v O’Brien & Anor 2015 IESC 96.
Does the defendant have an arguable defence that he was a consumer?
41. The defendant argues that he has put sufficient facts before me to be permitted to defend the summary proceedings on the grounds that he was a consumer, and therefore entitled to the special protection afforded to a consumer under the Consumer Credit Act 1995, and the European Communities (Unfair Terms in Consumer Contracts) Regulations.

42. The factual nexus on which he relies may briefly be stated. The plaintiff was at all material times employed as a financial trader and the loans in respect of which this claim is brought were not loans obtained by him for the purposes of that business. Rather, the plaintiff says on affidavit that on account of tax advice he intended retaining substantial funds out of Ireland until he established residence in Ireland in early 2008, that he borrowed monies in Ireland so as to invest in “safe pension type investments to secure my family’s future”.

43. There have been a number of recent High Court decisions which deal with the question of whether a borrower is or could be said to be a consumer for the purposes of the legislation. Certain themes emerge from these which it is convenient to identify separately. Broadly these are:

(a) The relevance of the characterisation put on the loans by the parties at the time of the advance;
(b) The scale of the borrowing;

(c) Borrowing for personal investment purposes outside a business;

(d) Whether the court should construe the definition of a consumer strictly.

I deal now in sequence with these themes.
The characterisation of the loans by the parties
44. The two first loans advanced to Mr. Lavelle were each made subject to the general conditions then operated by Anglo in respect of consumer loans. The documentation comprising the offer contained a single page document headed up “Credit Agreement, regulated by the Consumer Credit Act, 1995”, and identified the amount of credit advanced, the period of the agreement, the number and amount of instalments, the total amount repayable, the cost of credit, the APR and the arrangement fee. In bold print there was stated that the borrower could withdraw from the agreement at any time within 10 days of receiving the agreement and that legal advice should be taken before it was signed. The borrower signed an acceptance in standard form and on a separate page by which he waived the 10 day cooling off period under ss. 30 and 50 of the Consumer Credit Act, 1995.

45. The second facility letter also contained a similar document and the borrower, by his signed acceptance, also waived the cooling off period.

46. The third, fourth and fifth facility letters did not include the one page document identifying the credit terms in a manner intended to satisfy the Consumer Credit Act, and there was no part of the document by which the borrower could waive or seek the benefit of the 10 day cooling off period. The borrower instead signed a certificate confirming that the facility was to be advanced to fund an identified investment, and that the provisions of the Act did not apply “as the facility is being advanced for the purposes of my trade, business or profession”, and the certificate contained the following at para. 3:

“None of the provisions of the Consumer Credit Act, 1995 (the “Act”) apply to the Facility as the Facility is being advanced for the purposes of my trade, business or profession and I am not therefore a “consumer” within the meaning of the Act.”
The document also confirms that the provisions of the European Communities (Unfair terms in Consumer Contracts) Regulations, 1995 did not apply for the same reason.
47. The fourth and fifth facility letters were in broadly similar terms.

48. Accordingly, of the five facility letters, seven loans, two were expressly contained in documentation which expressly made reference to the provisions of the Consumer Credit Legislation.

49. The first argument made by the defendant is that he was treated as a consumer by Anglo for the purposes of the first two loans, nothing changed in his personal circumstances between the first two loans and the later loans, and all of the loans were taken out by him for the same general purpose, namely to make pension or long term investments to secure his family’s future.

50. Stapleford submits that all seven loans must be characterised as non-consumer loans and that the inclusion of certain documentation which suggests a characterisation of the first two loans as consumer loans is not determinative.

51. It is established as a matter of law that the question of whether a person is a consumer is a matter to be determined objectively and irrespective of the characterisation that the parties might have applied to the loan. In ACC Loan Management Ltd. v. Browne [2015] IEHC 722 on which both parties relied in support of the proposition, it was stated by me that the label or characterisation that the parties themselves “may be deemed to have put on a loan is not determinative”, although the characterisation put by the parties themselves may be of some benefit to that analysis. The point is not controversial and is established in the authorities.

52. Apart from that general proposition however, Stapleford asserts that the documents sent by Anglo with the first two loans do no more than suggest that the Bank proceeded as if the loans were regulated by the Consumer Credit Act 1995, and do not of themselves comprise an acknowledgement on the part of the Bank that Mr. Lavelle was a consumer. I accept that proposition and I do not consider that the documentation sent by the Bank of itself contains an acknowledgement or assertion on the part of the Anglo that Mr. Lavelle was a consumer, and that the Bank did no more than conduct its business so as to ensure that it did not fall foul of the legislation.

53. Equally however it seems to me that Stapleford is incorrect in asserting that the statement by Mr. Lavelle in the documents that accompanied his signature of acceptance on the third, fourth and fifth facility letters amount to an acceptance or acknowledgment by him that he was not a consumer, and while Mr. Lavelle can be assumed to have personal knowledge of the purpose of his borrowings, his own characterisation of the transaction is not determinative. The documents executed by Mr. Lavelle might in suitable circumstances have the legal effect of an estoppel by representation, but no argument has been made in this case that this is so, and no evidence of reliance by the Bank is made out.

54. However correspondence has been exhibited which might amount to an acknowledgment by IBRC that Mr Lavelle was a consumer for the purpose of the first two loans, especially a letter of 5th June, 2013 from Messrs. Arthur Cox & Co. Solicitors to Mr. Lavelle which contains an express recognition that the first two facility letters were governed by the Consumer Credit Act, 1995.

55. Before this, by a letter sent from IBRC to Mr. Lavelle on 2nd April, 2012 and in express reply to correspondence from Mr. Lavelle the following statement is made by reference to a letter of 1st March, 2012 from IBRC to Mr. Lavelle:

“Paragraph 1.4 of this IBRC letter acknowledges that the CCA applies to the June 2006 facility letter. Although this is clear in the response by IBRC we confirm this again. For the avoidance of any doubt, we confirm again that the CCA applies to the facility letter dated 23 August, 2006.”
56. The letters referred to are the first two facility letters.
57. It seems clear that the purpose of the later loans was broadly similar to the purpose of earlier loans, and Mr. Lavelle has made out an arguable defence that he could have been a consumer for at least the first two loans, and that Anglo had no reason to treat him differently for the purposes of the third, fourth and fifth facilities. The advances in January and May of 2007 were top-ups on the earlier loans, and may require to be characterised in conjunction with those loans to which they are subsidiary. Finally the last facility letter of 14th December, 2007 was accepted by Mr Lavelle at a time when the investment in respect of which he was making the borrowings had not yet been specified or determined and that it cannot be clear in that context what the purpose of the loans was.

58. All of these factors persuade me that the characterisation of the loans is difficult to resolve at summary hearing.

59. Mr. Lavelle argues that the loan agreements in each case breach the requirements of s. 30 and/or s. 54 of the Act as amended. Breach of s. 30 makes a loan unenforceable. The plaintiff denies any such breach but of itself the mere assertion by Mr. Lavelle of an alleged breach would not be sufficient to prevent the determination of this factual dispute on a summary hearing. However, Mr. Lavelle makes specific averment on affidavit that he signed the documents for the first loan (2nd June, 2006) on the first tee of an identified golf course. He said he was not handed copies of any of the relevant paperwork on that day nor was he subsequently sent or given any signed copies. He explained how and why he is aware of this and a degree of embarrassment he met when he was unable to provide copies to his accountant some time later. He says also that the document was not signed at his home, albeit that this appears on the document itself. He makes similar averments with regard to the second facility letter of 23rd August, 2006, namely that he was not sent or given a copy of the signed agreement, the facility accepted by him on 3rd January, 2007 and that of 14th May, 2007.
The scale of the borrowing
60. The second theme to emerge in recent jurisprudence regarding the status of a person as a consumer arises from a decision of Barrett J. in Ulster Bank Ireland Ltd. v. Healy [2014] IEHC 96, whether the amount or scale of a borrowing may be determinative or relevant to the characterisation of a transaction.

61. In Ulster Bank Ireland Ltd. v. Healy, Barrett J. who was hearing an application for summary judgment in which Mr. Healy asserted that he was a consumer, permitted the defendant to defend on the grounds that he considered it arguable that Mr. Healy was a consumer when he borrowed monies for the stated purpose of purchasing investment properties in the United Kingdom to hold as long term pension type investments for the benefit of his own retirement or for the benefit of his family. Mr. Healy was an employee in a company that manufactured construction materials and he had no established or identified business of investment or property purchase. Barrett J. considered that a borrowing for the purposes of providing for a retirement income, or in the hope of funding a better quality of life either in retirement or for one’s family, of necessity did not make the borrower a professional investor or property investor. He went on to say:

“Of course there must come a point when a person crosses the Rubicon from consumer to professional. However, it could be contended that a man such as Mr. Healy who has invested not insignificant but not extravagant sums in property in order to provide for his retirement and to benefit his family has not necessarily crossed this line.”
62. Barrett J. considered the judgment of the European Court of Justice in Benincasa v. Dentalkit (Case C-269/95) [1997] E.C.R. 1-03767 and quoted from the judgment of Kelly J. in Allied Irish Banks Plc. v Higgins & Ors. [2010] IEHC 219 at para. 28 as follows:
“The European Court of Justice clearly envisaged that the concept of the consumer was confined to a person acting in a private capacity and not engaged in trade or professional activities… Only contracts concluded for the purpose of satisfying an individual’s needs in terms of private consumption are protected by the Directive.”
63. Having regard to the low threshold that a defendant must satisfy in order to be permitted to defend, Barrett J. determined that it was arguable that Mr. Healy was a consumer as he never had the business of property investor and that he had made a stateable argument that this was so.
64. The Rubicon identified by Barrett J. is said by counsel for the plaintiff to play a part in his later judgment in KBC Bank Ireland Plc. v. Osborne [2015] IEHC 795 where he rejected the contention that Mr. Osborne was a consumer and took the view that what was involved was clearly business lending, and that the loans were “business loans issued to a businessman in respect of a business park”

65. Barrett J. did not in fact expressly say that the scale of Mr. Osborne’s lending of approximately €3.26m was such that he did cross the Rubicon, but the plaintiff suggests that it was implicit in his decision. I disagree with that proposition.

66. The finding of Barrett J. in KBC Bank Ireland Plc. v. Osborne related to the purpose of the loan, identified by him as a loan for the purposes of the refinance an existing debt secured on certain industrial units located in Gorey Business Park, Co. Wexford, and another loan taken out for development works on that facility. It is clear from the recital of facts in the judgment of Barrett J. that Mr. Osborne was himself actively engaged in the refurbishing of certain units in the business park and was in receipt of rents from some or all of those units. I do not regard the judgment of Barrett J. in that case as being one in which he identified the quantum or scale of the loan as being determinative or even relevant to the question of whether a borrower was a consumer.

67. Both the plaintiff and the defendant agree that the test for a court in determining the characterisation of a borrower is not one in respect of the scale or quantum of borrowing plays a part. I agree and the starting point must be the definition of a consumer for the purposes of the Consumer Credit Act, 1995 and the way in which the definition has been treated in subsequent judgments of the Irish and European courts, all of which point to purpose and not scale as the defining factor.

68. Longmore J. in Standard Bank London Ltd. v. Apostolakis (No. 1) [2002] CLC 933, pointed to an obvious reason why the question of scale could not be determinative of the status of a contract as follows:

“Difficult questions would arise as to where one would start to draw lines. One could hardly apply that to what I have called the umbrella agreement when it was made. It could only be applied retrospectively. The requirement that one looks to the purposes for which the contracts were made seems to me to militate against looking at a general consequence or a scale of value in the context of both the Convention and the Regulations.”
69. I consider the statement of Barrett J. that there might exist a Rubicon which could determine the characterisation of a consumer contract in Ulster Bank Ireland Ltd. v. Healy to be obiter, and to not find support in the authorities, and not binding on me. He did not rely on a test of the scale of the borrowings in his later judgement. Furthermore it is my view that the case law identifies the purpose of the loan as being the defining or identifying characteristic and not the quantum of the loan. This is also a position which is consistent with common sense and it is perfectly possible for a person to borrow a very substantial amount of money, an amount similar to or even greater than that borrowed by Mr. Lavelle, for the purposes of acquiring a private residence or a holiday home for personal use and in that circumstances such a person would readily be identified as a consumer.
70. I do not consider that the scale of the borrowings can be determinative.
Borrowings for personal investment purposes
71. The defendant borrowed for the purpose of investing in commercial property funds or investment instruments in all cases managed by a firm of investment managers, Quinlan Private. That investment company managed the funds on behalf of investors and the investors did not come as a result of the investments to acquire title to any of the real property acquired by the funds, and took instead an interest in an investment instrument.

72. The authoritative judgment of Kelly J. in Allied Irish Banks Plc. v Higgins & Ors. considered whether the defendants had made out an argument that they had contracted a loan from AIB as consumers within the meaning of the Act. The loan in respect of which the claim was brought was made for the stated purposes of a partnership formed for the purpose of acquiring and developing lands in Duleek, Co. Meath. The Court accepted that property investment was not the principal or main business of any of the defendants. Rather, the money was borrowed “to invest it in promoting another business with a view to a profit”. Central however to the finding of Kelly J. was that the defendants acted as partners in a partnership “with a view to investing in property and its development for profit”. He held, in those circumstances, that they engaged in business and that they had made out no arguable or triable issue that they were engaged as consumers.

73. Allied Irish Banks Plc. v Higgins & Ors. can be distinguished from the present case in one important respect. The defendants in that case were a partnership and borrowed the relevant monies qua partners. Kelly J. made express reference to this in his judgment, and pointed to the clear legal proposition that a partnership is engaged in a business. Further, the partnership comprising the defendants in Allied Irish Banks Plc. v Higgins & Ors. itself engaged in the business of acquiring and developing the lands. Kelly J. held that a person may have more than one trade, business or profession, and that a person cannot be characterised as a consumer merely on account of the fact that borrowings were made in respect of a business or a trade which was not that person’s main, primary, or even established, business. It is noteworthy that the partners did not seek to argue that they were personal borrowers outside the partnership.

74. I accept the argument of the defendant that, prima facie at least, Mr. Lavelle’s borrowings may be distinguished from those the subject matter of the judgment of Kelly J. in Allied Irish Banks Plc. v Higgins & Ors. in that Mr. Lavelle was borrowing monies not to himself purchase or develop property, but so that he could invest in a fund which would own or manage property investments. He was not involved in purchasing business properly or in the business of investment. While Mr. Lavelle was employed as a trader, there was no evidence before me that he was personally involved in the business of investment, nor was there any suggestion that he personally engaged in the evaluation or management of the investments. The evaluation, choice and management of the investments were to be done by Quinlan Private and Mr. Lavelle was a client of that firm.

75. Mr. Lavelle was borrowing monies to invest in an investment fund or financial instrument and was not therefore borrowing to invest directly in any property or commercial transaction in which he would directly benefit. I accept that it is arguable that this factor distinguishes Mr. Lavelle from the partnership which comprised the defendants in Allied Irish Banks Plc. v Higgins & Ors., and also from the defendant in KBC Bank Ireland Plc. v. Osborne.

76. The CJEU in Benincasa v. Dentalkit made the following statement which has been quoted with approval in a number of Irish decisions:

“17. Consequently, only contracts concluded for the purpose of satisfying an individual’s own needs in terms of private consumption come under the provisions designed to protect the consumer as the party deemed to be the weaker party economically. The specific protection sought to be afforded by those provisions is unwarranted in the case of contracts for the purpose of trade or professional activity, even if that activity is only planned for the future, since the fact that an activity is in the nature of a future activity does not divest it in any way of its trade or professional character.”
Kelly J. quoted that extract with approval in Allied Irish Banks Plc. v Higgins & Ors. and, at p. 28 of the judgment, repeated the phraseology in respect of which the defendant makes argument in the present case, namely:
“Only contracts concluded for the purpose of satisfying an individual’s needs in terms of private consumption are protected by the Directive.”
77. Mr Lavelle argues that the uncontroverted evidence is that he was not engaged in the business of investing in the identified properties in Cologne, Baggot Street or Sofia. He has put forward evidence that he was investing for personal purposes and for those of his family, and was not engaged in the underlying businesses in respect of which his investments were made, and took no part in managing or choosing the investments. He chose to invest through Quinlan Private, and Quinlan did the management and evaluation of the products. Indeed, he points to the fact that at the time of the last facility letter, the last three of the seven loans, some of the precise investments were not identified.
78. In Allied Irish Banks Plc. v. Fahy [2014] IEHC 244 O’Malley J. quoted Benincasa v. Dentalkit and the later case of Gruber v. Bay Wa AG (Case C-464/01) and determined the question before her on the evidence and took the view that the loan was for “unquestionably business purposes”, that the defendant was the full beneficial owner of two property companies and was engaged in the property business through them and in her own personal capacity. The monies were borrowed for the purposes of the business property transactions, either through the company or by herself personally. O’Malley J. also noted that the funds advanced were as a matter of fact paid to the companies and that the defendant was at all times seeking a business facility.

79. The judgement of O’Malley J. does not deal with a borrowing in respect of an investment made personally and not through a company. She also does not deal with the question that arises centrally in the present case where the loans were for the acquisition of investment instruments to be managed and operated by an entity not controlled or owned by the borrower whether through a partnership or a company.

80. The defendant says the facts are close to those dealt with by Longmore J. in the English High Court in Standard Bank London Ltd. v. Apostolakis (No. 1) also referred to by O’Malley J. in Allied Irish Banks Plc. v. Fahy where she noted that Longmore J. had distinguished Benincasa v. Dentalkit on the basis that the factual situation was very different and,

“He doubted whether the Court of Justice had intended to substitute the words “for the purpose of satisfying an individual’s own need in terms of private consumption” for the definition in the Directive.”
81. Longmore J. was giving judgment in the English Commercial Court on a preliminary issue of whether a contract between the defendants, a Greek married couple, a civil engineer and a lawyer, and a bank. The loan had been entered into as a result of which the bank was to purchase ECUs to the value of €7million on their behalf in exchange for drachmas and Longmore J. held that the borrowings were consumer transactions. He considered that it was not part of the trade of the defendants as a civil engineer or a lawyer respectively, to enter into foreign exchange contracts and that they were not engaging in the trade of foreign exchange contracts as such but were rather “disposing of income which they had available”. As he put it:
“They were using the money in a way which they hoped would be profitable but merely to use money in a way one hopes would be profitable is not enough, in my view, to be engaging in trade. This is all the more so if one looks at the purpose of the contracts as Article 13 of the Convention invites one to do. These contracts were made by Mr. and Mrs. Apostolakis for the purpose of using their income in what they hoped would be a profitable manner. They were not trading in foreign exchange contracts in the sense that a bank or dealer can be said to trade. The evidence is all to the effect that it was outside their trade or profession that the contracts were being made.”
82. Longmore J. distinguished Benincasa v. Dentalkit on its facts in that Senor Benincasa had made the contract to buy equipment to set himself up as a dentist in Munich using Dentakit’s trademark, and held that the factual context was different in that the needs of Mr. and Mrs. Apostolakis were for private consumption, and the investment was an “appropriate use for their income”. He described the investment as a private use of their private income, or that the defendants had “privately consumed their income” for the purposes of acquiring the foreign exchange product
83. I find the reasoning of Longmore J. difficult and I am not quite clear as to how he distinguished the judgment of the European Court in Benincasa v. Dentalkit. However his judgement has persuasive authority, and his finding that the use by Mr. and Mrs. Apostolakis of their own income or funds as sufficient to constitute them consumers of the financial instruments, that they were not themselves engaged in the trade of foreign exchange contracts was given in the context of European legal principles.

84. Further, this is the same result as was reached by Barrett J in Ulster Bank Ireland Ltd. v. Healy, in a decision which is binding on me, although he did not expressly rely on the judgement of the English High Court in his reasoning.

85. From the authorities in which a difference of approach is apparent, it is in my view at least arguable that the defendant is correct that he was acting as a consumer and the case law relied on by the plaintiff is not authority for the broad proposition that a person who borrows money to make a personal investment cannot be a consumer for the purposes of the legislation. I consider for that reason that the question may not readily be determined on a summary hearing. This is more evident when one looks at the two decisions of the CJEU on which reliance is placed and to the proposition advanced by the plaintiff that the test of whether a person is a consumer must be strictly construed. I turn to consider this proposition.
A strict construction?
86. The CJEU in Benincasa v. Dentalkit was hearing a reference for a preliminary ruling from an Italian court. The first question considered by the Court was whether a plaintiff who had concluded a contract with a view to pursuing a future trade or profession may be regarded as a consumer for the purposes of the Article 14 of the Brussels Convention of 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters as amended by the Accession Convention of 1978. The Court considered that the Convention affected only a “private final consumer, not engaged in trade or professional activities”. It then went on to say the following:

“It follows from the foregoing that, in order to determine whether a person has the capacity of a consumer, a concept which must be strictly construed, reference must be made to the position of the person concerned in a particular contract, having regard to the nature and aim of that contract, and not to the subjective situation of the person concerned. As the Advocate General rightly observed in point 38 of his Opinion, the self-same person may be regarded as a consumer in relation to certain transactions and as an economic operator in relation to others.
87. The test identified in Benincasa v. Dentalkit was further considered by the CJEU in Gruber v. Bay Wa AG on a preliminary ruling from the courts of Austria, again on the interpretation of the Convention on Jurisdiction. Express reference was made to the earlier judgment of the Court in Benincasa v. Dentalkit and the reasoning of the Court related to the fact that the provisions of Art. 13 of the Convention were a derogation from the basic rules of jurisdiction and that the requirements of legal certainty, as well as the fact that a provision which derogated from a general rule should be interpreted strictly, suggested that a contract for mixed private and professional purposes did not come within the special rules.
88. A difficulty is immediately apparent in relying on either Benincasa v. Dentalkit or the judgment of the court in Gruber v. Bay Wa AG, in that in both cases the Court was considering a provision which was a derogation from a general rule of jurisdiction. It is not readily apparent that the provisions of the Directive (Council Directive 87/102/EEC of 22nd December, 1986 as amended by Council Directive 90/88/EEC of 22nd February, 1990) or of the Irish consumer credit legislation ought to be construed as a derogation from any general rule. Rather, they are an attempt by Community and domestic law to offer special protection to a person who might have a deficit of bargaining power. There is nothing in my mind which suggests a strict construction of the concept of “consumer” for the purposes of the consumer protection legislation is warranted by the European case law. While Kelly J. in Allied Irish Banks Plc. v Higgins & Ors. quoted with approval from the judgment of the European Court of Justice in Benincasa v. Dentalkit, he did so for the purposes of the conclusion that he reached that the self same person can be a consumer in relation to certain transactions and an economic operator in others, and only some contracts concluded by an individual person may be properly characterised as consumer contracts. He nowhere in that judgment stated a view that the concept was to be interpreted restrictively.

89. In ACC Loan Management Ltd. v. Browne I observed at the stage of an application for summary judgment that I would not consider whether counsel for the defendants was correct that an overly restrictive interpretation of the notion of consumer is not intended by the Directive, or by the Act of 1995. The point remains to be decided by an Irish court or by the CJEU. However the argument that a less restrictive construction is warranted is one that adds weight to the submissions of the defendant that the legal issues in the present case are less than clear.
Conclusion on question of the status of the defendant as a consumer
90. The defendant makes the argument that as an investor in a financial instrument he was not, or could not be said to be, engaged in the business of the underlying assets. He was not a property developer as were the defendants in Allied Irish Banks Plc. v Higgins & Ors. . While the underlying funds may have been “sophisticated investments”, to use the language of the plaintiff that is not to say that Mr. Lavelle, by investing in those instruments himself was a sophisticated investor. His level of sophistication in any event seems to me to be irrelevant to how he is to be characterised for the purposes of the transaction.

91. I accept that there is sufficient evidence before me that Mr. Lavelle did not engage in the business of the underlying investments. He was not engaged in the activity of investing in commercial property or other commercial investments with his money. He was rather placing the money in the hands of somebody who would do that on his behalf, and he did so in the hope that his money would in turn generate further monies, or at least be secure in terms of the capital.

92. As a result of the conclusion come to by the English High Court in Standard Bank London Ltd. v. Apostolakis (No. 1), a judgment that was referred to with approval by O’Malley J. in Allied Irish Banks Plc. v. Fahy, and because of the decision of Barrett J. in Ulster Bank Ireland Ltd. v. Healy, and because there is no decided Irish case or judgment of the CJEU which deals with the matters I have outlined, I have come to the conclusion that the question of whether the defendant was a consumer is one that cannot readily be answered on the authorities. The factual matters identified by the defendant with regard to compliance with the requirements of the legislation are in my view more than mere assertions, unsupported by evidence, and do raise what Clarke J. identified in IBRC v. McCaughey as “a realistic suggestion that evidence might be available to support the argument put forward by a defendant.”
The burden of proof
93. Before I leave the topic of the nature of a consumer contract however, I wish to address a question that arose in the course of the argument, namely whether there is a presumption that a natural person is a consumer. In my judgment in ACC Loan Management Ltd. v. Browne, at para. 52, I made the following somewhat infelicitous statement:

“52. I consider that the legislation is such that a person is a consumer unless it can be shown that the person is acting inside the person’s business. I accept the argument of counsel for the defendant that the legislation is drafted such that in a sense the default position is that all natural persons are consumers unless it can be shown they are acting inside or for the purpose of the business in entering into a credit agreement.”
94. Barrett J. in KBC Bank Ireland Plc. v. Osborne expressly refused to agree with that particular conclusion, and I wish to take this opportunity to clarify the obiter statement by me in that judgment.
95. I have re-read the statement made by me at para. 52 of my judgment in ACC Loan Management Ltd. v. Browne and consider that it lacked clarity, and, having regard to the submissions of counsel in this case, I consider that the broad statement made by me therein is not borne out by the authorities and is not correct as a matter of law.

96. I agree with Barrett J. that there does not exist, as a matter of law, any presumption or default position that a natural person is a consumer. As Barrett J. said, “the only default position arising under the Act of 1995 is that a person other than a natural person cannot … be a consumer”. It was not my intention in making that statement in ACC Loan Management Ltd. v. Browne to express a view that there exists an evidential or factual presumption that all natural persons are consumers. The distinction may more properly be expressed as follows: only a natural person may be a consumer for the purposes of the legislation under the European Directives, therefore the first question that must be asked by a court is whether the transaction, be it a borrowing or other transaction, was conducted by a natural person or by a corporation or business entity such as a partnership.

97. As this is an application for summary judgment, the burden is on the defendant to establish to my satisfaction that he has an arguable defence that he is a consumer and that certain provisions of the legislation were not complied with by the predecessor in title of the plaintiff. Beyond that, I do not intend considering the broader question of where the burden of proof lies with regard to the establishment of the satisfaction of a court that a person is a consumer in the present case, as the matter did not require to be argued before me on the motion.
The quantum of the claim
98. The defendant makes a number of specific arguments with regard to the calculation made by the plaintiff in the grounding affidavit. These may briefly be outlined.

99. The defendant asserts that IBRC delayed in crediting the sum of €169,552 in his account between 2011 and 6th February, 2013. It is argued in those circumstances that interest for that period was incorrectly calculated. Without prejudice to its assertion that no error was made, the defendant has amended its figures and has reduced the sum in respect of which judgment is claimed by €20,000 to take account of this potential conflict of fact.

100. The second issue raised by the defendant was that he had agreed interest rates with IBRC during the period from 30th June, 2008 to 28th June, 2013. Mr. Lavelle exhibits correspondence with Anglo with regard to what was described as “interest rate hedges” and an email of 6th June, 2008, to suggest that there was agreed a rate of 4.96%. Mr. Lavelle says in his replying affidavit that the arrangement of an interest rate swap had not been discussed with him and that it “distorts the balance of the accounts”.

101. Thirdly, it is asserted that the bank credited the amount of €320,129 to the accounts in lieu of the sum of €383,842.90, in September, 2010. Again, he says that this has distorted the accounts.

102. Fourthly, the defendant says that certain monies were transferred to his account and not to a trust account, in accordance with his instructions. That suggestion would, it seems to me, not benefit the defendant with regard to the calculation of the plaintiff’s claim in that his personal accounts in respect of which this claim was brought were augmented by those amounts, and a smaller amount of interest accrued thereafter as a result.

103. Mr. Lavelle’s overriding proposition is that he should be entitled to test the evidence of calculations and his assertion that there has been a “distortion” of the accounts and that he ought to be afforded the benefit of discovery for the purpose of defending the quantum of the case. While he suggests that interest was charged at a penal rate but does not seem to be making any argument that the interest rate is unenforceable as being a penal rate.

104. I accept the argument of the plaintiff that the concession it has made which, in total, reduces the amount of its claim by €120,000 may be sufficient to deal with the assertions by the defendant. However, the calculations are likely to change with the delay now inevitable as a result of my decision that the defendant has raised a bona fide entitlement to defend and accordingly I will not consider that matter further
Conclusion
105. I therefore propose making an order that the defendant be permitted to defend the claim save in regard to the issue of the Statute of Limitations and the matter of the proof of assignment.

Sandy Lane Hotel Ltd v Times Newspapers Ltd

[2009] IESC 75

JUDGMENT of Mr. Justice Hardiman delivered the 16th day of November, 2009.

This is an appeal by the defendants from an order of the High Court, Johnson J., (as he then was) made the 7th November, 2005, whereby the High Court granted the application of the plaintiff to substitute “Sandy Lane Hotel Co. Limited” for “Sandy Lane Hotel Limited” in the present proceedings.

This order was made pursuant to Order 63 Rule 1(15) of the Rules of the Superior Courts.

The underlying cause of action here is libel. The plaintiff takes exception to an article published by the defendant as long ago as the 1st March, 1998. Proceedings by the present plaintiff were instituted in June 1998. In the course of the discovery process a variation between the name of the plaintiff, and the name of the Company shown on various Hotel accounts was noticed. The proceedings, after discovery, went dormant between 2001 and 2004. In June of the latter year a Notice of Intention to Proceed and a Notice of Trial were served. The present application was subsequently brought.

The High Court judgment.
The High Court judgment was very brief and the agreed note of counsel may be set out in full:

“Having considered the affidavit’s evidence and the submissions by counsel for the parties, Johnson J., having expressed the views during oral argument that (a) he believed that the defendants were at all times aware of the fact that the person taking the case was the owner of the Sandy Lane Hotel and (b) that justice would not be served if the position adopted by the defendants on the application were to succeed, ruled as follows:
‘I will grant an order in terms of the plaintiff’s Notice of Motion. In my view there is no injustice in so doing.’ ”

 

The Notice of Motion.
The Notice of Motion seeks an order “pursuant to Order 63 Rule 1(15) of the Rules of the Superior Courts for the correction of the name of the plaintiff in these proceedings to “Sandy Lane Hotel Co. Limited”.
Order 63, Rule 1(15) provides that the Master of the High Court may make:

“An order for the correction of clerical errors or errors in the names of parties in any proceeding, whether on consent or not, but subject to re-service when not on consent.”

The issue of this appeal may be stated simply: the plaintiff claims that the present application is within the rule just cited. The defendant denies this and says that the application should more properly be brought under Order 15, Rule 2 or Order 15, Rule 13 of the Rules. The defendant does assert that if the plaintiff were to bring an application under the last mentioned rules, it would not only contend that there was no mistake made but would further contend that the application should not be granted because the cause of action in the proposed plaintiff is statute barred. It would make a similar submission in relation to an application under Order 15, Rule 13.
The facts.
The Sandy Lane Hotel is a very widely known luxury hotel in Barbados. Since 1961 it had been operated by a Barbados Company called Sandy Bay Hotel Limited. This company owned the hotel, its grounds, and an adjacent golf course. At some stage it became part of the Trust Houses Forte Group.

In 1996 there was a sale to a “consortium of businessmen” by the Trust Houses Forte Group and this was achieved by selling the Company to a St. Lucia Company, Sandy Lane Hotel Limited. This Company then bought Sandy Bay Hotel Limited, which seems to have been a Barbados Company. About the same time a further Barbados Company, Sandy Lane Properties Limited was set up so that it could purchase some 500 acres of land 2 kilometres from the hotel but touching the furthest point of its grounds.

Sandy Lane Properties Limited is in turn owned by another St. Lucia Company, Sandy Land Holdings Limited. The effect of all this is that the two Barbados Companies, Sandy Bay Hotel Limited and Sandy Lane Properties Limited, were owned by two St. Lucia Companies, Sandy Lane Hotel Limited and Sandy Lane Holdings Limited.

On the 22nd April, 1997, Sandy Bay Hotel Limited, the Company which both owns and operates the Sandy Lane Hotel, changed its name to Sandy Lane Hotel Co. Limited. That is how and when the proposed plaintiff came into being.

All of these complex corporate transactions were carried out for tax planning purposes and to facilitate acquisitions.

The above account is based on a letter from the plaintiff’s solicitors, William Fry and Company of the 16th May, 2005 and on the affidavit of Brian O’Sullivan of the 11th June, 2005.

Mr. O’Sullivan is the Company secretary of the present plaintiff. He says frankly that:

“At the time of change of name in 1997, I thought nothing of the inclusion of the word ‘Co.’ in the title of the plaintiff.
Indeed, when the article appeared in the Sunday Times, and when proceedings were subsequently issued, I understood the name of the plaintiff company was Sandy Lane Hotel Limited. It was only when the issue was recently drawn to my attention that I recalled that the word ‘Co.’ had in fact been included in its title on the initiative of [a Barbados lawyer] as set out above.”

He further says that:

“The reason the error [that is, the alleged error in the name of the plaintiff] occurred is that the inclusion of the word ‘Co’ in the name of the plaintiff was not originally intended.”

It may be noteworthy that in the written submissions of the plaintiff, what they say is an error in the plaintiff’s name in the title of the proceedings is called “a clear case of an administrative error”.
They go on to submit that the plaintiff in making the present applicant:

“was not seeking to add a new party or to substitute a different party for the party who instituted the proceedings. It was simply seeking to correct an error in the name of the plaintiff as appearing in the title of the proceedings… this is not a case of the wrong plaintiff suing the defendant. The proceedings were issued on behalf and with the instructions of Sandy Lane Hotel Co. Limited through administrative inadvertence, the plaintiff was named as “Sandy Lane Hotel Limited” in the title to the proceedings.”

The plaintiffs then go on to characterise the defendant’s opposition to the application as “opportunistic”. They say “as a matter of happenstance, the plaintiff’s parent has the name Sandy Lane Hotel Limited. It is this happenstance that permits the defendants the opportunity to contend that the plaintiff ought to have applied for an order of substitution of one party for another as the plaintiff under Order 15 as opposed to Order 63.”
The Companies, of course, bear the names the “consortium” chose, and altered when they pleased. This is not “happenstance”.

The submissions quoted above, in my view, go to the nub of the case. I am not sure that they are helpful to the plaintiff. Order 63 Rule 1(15), which is a relief that may be granted ex parte by the Master, relates to “the correction of clerical errors or errors in the names of parties in any proceeding”.

This is to be contrasted with Order 15 Rule 2 which provides:

“Where an action has been commenced in the name of the wrong person as plaintiff, or where it is doubtful whether it has been commenced in the name of the right plaintiff, the court may, if satisfied that it has been so commenced through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as a plaintiff upon such terms as may be just.”

Order 15 Rule 13 provides:

“No cause or matter shall be defeated by reason of the mis-joiner or non-joiner of parties, and a court may in every cause or matter deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the court to be just, order that the names of any parties improperly joined, whether as plaintiffs or as defendants, be struck out and the names of any parties, whether plaintiffs or defendants who ought to have been joined or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all questions involved in the cause or matter, be added…”.

In construing Order 63 Rule 1(15) it is necessary first to note that the term “clerical error” has been the subject of judicial decisions.
In R. v. Commissioner of Patents, ex parte Martin [1953] 89 CLR 381, Fullager J. held that:

“… the characteristic of a clerical error is not that it is in itself trivial or unimportant, but that it arises in the mechanical process of writing or transcribing.”

In a later case, re Meres Application [1962] RPC 182 the term “clerical error” was described as follows in another patent case, in words which plainly followed the case cited above:

“The words ‘clerical error’ must, I think, be taken to mean a mistake made in the course of a mechanical process such as writing or copying as distinct from an order arising, e.g. from lack of knowledge, or wrong information, in the intellectual process of drafting language to express intentions.”

Having regard to the structure of Order 61 Rule 1(15) I believe that the phrase “errors in the names of parties” must be construed in the same sense as the proceeding phrase, with which it is “eiusdem generis”, “clerical errors”. Either category of error must be construed in contradistinction from another sort of error arising from “lack of knowledge or “wrong information…”. It appears to me, from a consideration of Mr. O’Sullivan’s affidavit on behalf of the plaintiff, that the mistake made in this case is not one which can be described as a clerical error, or anything like it. He frankly admits that the name “Sandy Lane Hotel Co. Limited” was not originally intended to be used in the proceedings. This was because, although he knew of the history of the companies, it was not present to his mind, or to the mind of the lawyers, that the company actually operating the hotel was the Sandy Lane Hotel Co. Limited. This in turn was because, as he very frankly says “At the time of the change of name in 1997 I thought nothing of the inclusion of the word ‘Co.’ in the title of the plaintiff.”
This is not in my view a clerical error. The error here arose due to a mistaken belief and a failure to ascribe any significance to the change of name of 1997. This is a misguided state of mind with which one cannot have much sympathy, given that it was made by or on behalf of “a consortium of businessmen”, in the course of a complicated series of arrangements made for tax planning purposes, in which they obviously had the benefit of the best legal and taxation advice.

The consortium running the Sandy Lane Hotel were of the view that it was important for corporate or tax planning purposes that the entity operating the hotel should be the Sandy Lane Hotel Co. Limited. Nor did this simply involve a change of name: there was another, completely different, Company called the Sandy Lane Hotel Limited. The operating Company was a Barbados Company but the latter Company, which appears as plaintiff at present, is a St. Lucia Company. The plaintiff’s case would in my opinion have been a stronger one if they had simply failed to get the name of the operating company right. But in the events that happened they actually used the name of an entirely different Company, which however appears to be the parent Company of the operating Company. This in my view is not a clerical error or anything similar to a clerical error. It requires, if it is to be remedied, the substitution of a new entity which co-existed the plaintiff at all material times. Because of the delay (and there has been gross delay) the defendants might be able to object to the substitution of a new party on the grounds that the statute of limitations has run as against that party. Since this is a separate issue which may well come before the courts, I will say nothing about it. But I would not be prepared to deprive the defendants of the opportunity of raising it.

I do not believe that this is an application appropriate to Order 63 Rule 1(15) and would therefore allow the appeal and refuse the relief sought by the plaintiff.

Fitzgerald v MGN Ltd

[2010] IEHC 259

Judgment of Mr Justice Michael Peart delivered on the 28th day of June 2010:

On the 28th July 2009 the plaintiff issued a Plenary Summons in which he named Mirror Group Newspapers Limited as defendant. By so doing it was the plaintiff’s intention to claim damages for libel against him arising from an article which appeared in The Irish Daily Mirror on the 30th July 2003. The plaintiff believed at that time of issue of these proceedings that the defendant company was the publisher of that particular newspaper, and had carried out a search which satisfied him that the registered office of the defendant company was Liberty Hall, Dublin 1.

The date of issue of these proceedings was just two days within the 6 year limitation period for such proceedings under the Statute of Limitations, 1957.

He was informed that the Mirror Group were at that time located at North Circular Road. He went to that address and met with a James McNamara who received the plenary summons from the plaintiff. Not having received any Entry of Appearance on behalf of the named defendant, the plaintiff wrote to the company on the 21st August 2009 calling upon it to enter an appearance, and enclosing a letter of consent to late appearance. The plaintiff has exhibited a letter dated 21st August 2009 from McCann Fitzgerald, solicitors, which makes no reference to the said letter from the plaintiff to the defendant company of the same date, so presumably these letters crossed in the post. That firm stated that they represent “MGN Limited” who had passed to them the proceedings issued against Mirror Group Newspapers Limited. It went on to point out that the Irish Daily Mirror Newspaper was published by MGN Limited and not the company named as defendant, and that the proceedings were therefore issued against the wrong company at an incorrect registered office, and called upon the plaintiff to discontinue the proceedings.

The plaintiff replied to that letter by letter dated 4th September 2009 stating that his proceedings had been accepted on behalf of “your client” by James McNamara, Deputy News Editor “of your client” on the 28th July 2009, and stated that in such circumstances the proceedings were validly issued and served and again called upon the firm to enter an appearance.

By 24th November 2009 the plaintiff had received no reply to his letter dated 4th September 2009, and wrote a reminder letter to which a reply was made by letter from the same firm dated 2nd December 2009. That letter again stated that the firm did not act for Mirror Group Newspapers Limited and again stated that this company was not the publisher of the newspaper which the plaintiff claims had defamed him. It explained again that the Irish Daily Mirror was published by MGN Limited with a registered office at One Canada Square, Canary Wharf, London E14-5AP, and that this information is printed on every copy of the newspaper in question, including that in which the article in question appeared on the 30th July 2003.

That letter went on to make the point that any proceedings which the plaintiff may thereafter issue against the correct defendant, MGN Limited, would be “out of time” not having been issued within 6 years of the date of publication of the article in question, and requested that in any application which the plaintiff might make to the High Court in relation to the matter this letter would be brought to the Court’s attention.

On the 18th January 2010 the plaintiff in person made an ex parte application to the High Court in order to amend the name of the defendant to MGN Limited. That order was granted.

On the 8th February 2010 the plaintiff made a further ex parte application and obtained an order permitting further amendments to the plenary summons by inserting the registered office of MGN Limited, namely 1, Canary Square, Canary Wharf, London, and including also therein the indorsement in order to indicate that that the proceedings are such as come within Council Regulation (EC) No. 44/2001, thereby enabling the proceedings to be served outside the jurisdiction without the need to obtain any order for service outside the jurisdiction.

The plaintiff failed to carry out these amendments within the permitted time under the Rules of the Superior Courts, and on the 15th March 2010 he applied for and obtained an extension of time for doing so. The amendments were carried out in due course by the plaintiff.

By letter dated 16th April 2010 the plaintiff wrote to McCann Fitzgerald and enclosed a copy of the amended plenary summons, together with the orders made by the High court on the 18th January 2010 and 8th February 2010 respectively, and requesting entry of appearance.

That firm has entered an appearance in order to protect its client’s position so that no judgment would be applied for in default of appearance, but maintains that the amendment of the title of the proceedings whereby MGN Limited is named cannot protect the plaintiff from a claim by that defendant that the claim is statute-barred given that the amendment was ordered outside the limitation period.

In due course, Counsel for the defendant mentioned the matter to this Court (the plaintiff being present also) in view of the defendant’s concerns, and leave was given to issue a Notice of Motion to set aside the orders which the plaintiff had obtained on an ex parte basis.

The grounding affidavit of Lesley Caplin, solicitor for the defendant and the replying affidavit filed by the plaintiff in response thereto add nothing to the sum of knowledge thus far, except, and quite importantly, the plaintiff has stated clearly in this affidavit that the application which he moved on the 18th January 2010 was an application pursuant to the provisions of Order 15 of the Rules of the Superior Courts, 1986 (“RSC”).
Submissions:
The first matter to emphasise is that this is an application by the Defendant to set aside the ex parte orders which the plaintiff applied for and obtained on the dates referred to above. It is not an application to strike out the proceedings or otherwise dismiss them on the basis that no reasonable cause of action is disclosed, or that because of a Statute of Limitation issue which will be pleaded by MGN Limited, they have no prospect of success.

The defendant submits that being an application to substitute a party under Order 15, rule 13 RSC, and not one under the provisions of Order 63, rule 1 (15) RSC simply to correct a clerical error in the name of a defendant who was at all times the intended target, the application firstly ought to have been on notice; but secondly that in any event the Court ought not to have granted the order dated 18th January 2010 in circumstances where the effect of the order was to commence the proceedings from that date against MGN Limited, an entirely separate company, and at a time when the plaintiffs claim against that company was already clearly statute-barred, being well outside the six year limitation period.

The plaintiff, appearing personally in Court to argue his case before me, has stated that he honestly believed that Mirror Group Newspapers Limited was the correct defendant in order to make a claim in respect of an article appearing in the Irish Daily Star. He has also sought to derive solace from the fact that service in respect of that defendant was accepted by an employee of MGN Limited at the premises on North Circular Road, and he has exhibited a copy of a business card handed to him by that employee at that time, and which bears the name MGN Limited below the employee’s name. He submits that there can be no prejudice given that it is clear from the Indorsement of Claim that it is clear that it is the Irish Daily Star which published the article complained of. As I have already stated he had made a company search and found details of Mirror Group Newspapers Limited and presumably he assumed that this was the correct defendant. He appears not to have inspected the newspaper in question to ascertain the identity of its publisher.

One can easily have some sympathy for someone in the position of the plaintiff, particularly where he appears personally and has not engaged lawyers to act on his behalf. Such a plaintiff cannot be in a position to be know how precisely a large publishing empire has organised its corporate structure. Such structures can be labyrinthine in nature, with many subsidiary and associated companies which operate individual enterprises within the overall group. Nevertheless, in the present case, it is a fact that the publisher of a newspaper is required to state its identity in its newspaper, and it would appear from the correspondence which has emanated from McCann Fitzgerald that it was done in the newspaper complained about herein.

I am satisfied first of all that the error which the plaintiff sought to correct cannot be characterised as a clerical error. It has not occurred through “the mechanical process of writing or transcribing” – a phrase used by Fullager J. in less technically advanced times than now to describe a clerical error in R. v. Commissioner of Patents, ex parte Martin [1953] 89 CLR 381, and which is adopted by Hardiman J. in Sandy Lane Limited v. Times Newspapers Limited and Others, (Unreported, Supreme Court, 16th November 2009). The learned judge distinguishes such a mistake from one arising from a lack of knowledge or wrong information as discussed in Re Meres Application [1962] RPC 182. In any event, the plaintiff has not sought to bring his application within Order 63, r. l (15) RSC. He accepts therefore that the amendment was not because of a clerical error as such, but is an application to substitute a different defendant for the defendant originally named in the proceedings.

I am not too concerned as to whether or not the plaintiff’s application ought more properly have been brought by way of Notice of Motion. It probably should, given that the plaintiff had received correspondence from McCann Fitzgerald. On the other hand that firm had not entered any appearance and were not on record, and furthermore, in their letter dated 2nd December 2009, they had requested the plaintiff to bring their letters to the attention of the Court in any application which he may wish to make.

Given the opportunity which any party affected by an order obtained ex parte has to seek to have it set aside, nothing much turns on this issue in the present case, and indeed, the defendant does not make the submission as its primary one.

The central issue for determination really is a simple one, namely whether the Court ought not to add or substitute a party as a defendant to proceedings under Order 15 RSC in circumstances where it is known that as of the date of such order the limitation period has already expired and that the statute will be pleaded in any Defence which may be delivered by that party. This question was considered comprehensively by O’Neill J. in Kinlon v. Córas Iompair Éireann, (Unreported, High Court, 18th March 2005). That was a case where the plaintiff had issued proceedings arising out of injuries sustained by the plaintiff when she was hit by a bus in Dublin. The proceedings which were issued named Córas Iompair Éireann as defendant, whereas the correct defendant was Bus Átha Cliath. The plaintiff delayed in making an application to substitute the latter company, but eventually did so by way of an application to the Master of the High Court who refused to make the order sought. The plaintiff appealed.

During the course of a careful and comprehensive judgment, the learned O’Neill J. examined an apparent conflict between two judgments of the Supreme Court relating to this type of issue, namely those in O’Reilly v. Granville [1971] I.R. 90 and Allied Irish Coal Supplies Limited v. Powell Duffryn International Fuels Limited [1998] 2 IR 519. In that regard, and as noted by O’Neill J. the late Shanley J. had in Southern Mineral Oil Limited (in liquidation) v. Cooney (No. 2) preferred the conclusion in the latter case on the basis that he was bound to follow the later decision. However, O’Neill J. identified that in Allied Irish Coal Supplies Limited v. Powell Duffryn International Fuels Limited there is no indication therein that O’Reilly v. Granville was referred to in argument, and that it could not be the case in such circumstances that O’Reilly v. Granville should remain good law which he was bound to follow. Left with two decisions which diverge, O’Neill J. for the reasons stated by him preferred to rely still upon the long-standing authority of O’Reilly v. Granville.

Having carried out an extensive examination of the relevant case-law, he concluded that the law in this country in relation to this topic is to the following effect:

“In summary therefore I take the law on this topic to be to the following effect:
1. There is no established rule of practice to the effect, that where a defence under the Statute of Limitations may be available to a proposed defendant that such proposed defendant should not be joined as a defendant in proceedings under O. 15 (13) of the Rules of the Superior Court.
2. The joinder of an additional defendant does not have the effect of deeming that defendant to have been a party to the action from the date of issue of the original writ. An added party cannot be considered to have been a party to the proceedings earlier than the order giving leave to add. Therefore there is nothing in the Rules of the Superior Courts or in substantive law which would restrict an added defendant’s right to rely on a defence under the Statute of Limitations, i.e., an added defendant’s right to plead the Statute cannot be adversely affected, by his being joined to the action.
3. A defence under the Statute of Limitations must in every case be pleaded. [See O. 19 r. 15].
4. A court should not assume that a proposed defendant sought to be joined under the O. 15 (13) would avail of a defence under the Statute of Limitations.
5. The court in an application under O. 15 (13) to join an additional defendant should not attempt to determine in advance that a potential defence under the Statute of Limitations Act will be successful.”
I respectfully agree with these conclusions, and propose to decide the present application by reference to them.
It follows that it was open to the Court, albeit on foot of an ex parte application, to permit the plaintiff to substitute MGN Limited as the defendant in these proceedings in place of Mirror Group Newspapers Limited. However, it is clear that by so permitting, the entitlement of MGN Limited to plead the Statute of Limitations in any Defence it may choose to deliver is in no way diminished, since the joining of that company as a defendant operates only from the 18th January 2010 and in no way results in a situation whereby the proceedings are deemed to have been commenced against MGN Limited as of the date of issue of the plenary summons.

Clearly, it is highly probable that the defendant will plead the statute, but it is not a matter for this Court to prejudge the likely outcome of that plea at this point in time, when it has not as yet been pleaded. But the plaintiff should be aware that in the event that he fails to overcome that defence, should it be made in due course, he will be exposed to the possibility at least of an order for the costs of the proceedings should they be dismissed.

For the moment, however, it is appropriate that I refuse the application of the defendant to set aside the orders of the 18th January 2010 and that of the 8th February 2010.

Sandy Hotel Company Ltd v Times Newspapers Ltd

[2010] IEHC 443

JUDGMENT of Kearns P. delivered on the 10th day of December, 2010.
This is an application for an order pursuant to Order 15, rule 2 of the Rules of the Superior Courts, 1986 substituting “Sandy Lane Hotel Co. Limited” (hereinafter referred to as “the proposed plaintiff”) for “Sandy Lane Hotel Limited” (hereinafter referred to as “the plaintiff”) as the plaintiff in this action.

The plaintiff is a holding company formed in 1996 which is registered under the laws of St. Lucia. The proposed plaintiff is the wholly owned subsidiary of the plaintiff. The proposed plaintiff is the owner and operator of a world-renowned hotel business, the Sandy Lane Hotel, in Barbados. The plaintiff herein claimed damages for libel against the defendants arising from the publication of an article in the Sunday Times on the 1st March, 1998. The first defendant is the publisher of the article and the second and third defendants are journalists and authors of the article.

The proceedings were instituted against the defendants by way of plenary summons dated the 15th June, 1998, with affidavits being exchanged by the parties in April, 2001. The proceedings were dormant until June, 2004 when a Notice of Intention to Proceed together with a Notice of Trial were served.

Following a review of the discovery made by the plaintiff, it emerged that the plaintiff’s name on the title to the proceedings was incorrectly stated as being “Sandy Lane Hotel Limited” and not “Sandy Lane Hotel Company Limited”. The plaintiff then brought an application pursuant to O. 63, r. 1 (15) of the Rules of the Superior Courts for an order correcting the name of the plaintiff in the proceedings. The High Court granted the order sought. The defendants successfully appealed that order to the Supreme Court where Hardiman J. delivered judgment (with Fennelly and Macken JJ. concurring) on the 16th November, 2009. As a result of the Supreme Court’s refusal to amend the title, this application was brought under Order 15 of the Rules of the Superior Courts.

SUBMISSIONS OF THE PLAINTIFF
Counsel for the plaintiff relied on three arguments when requesting the Court to grant the order sought as follows: First, that a bona fide mistake in the nomination of the plaintiff had occurred in this case; second, the change of name of the plaintiff was necessary for the proper determination of the libel proceedings initiated in 1998, and third, contrary to the submission of the defendants, delay in moving for relief should not be allowed to defeat the application.

It was counsel’s submission that the action was commenced in the name of the wrongly described plaintiff through a bona fide mistake. This was not a case of the plaintiff choosing the wrong party to take the action and then later seeking to bring in a different party and counsel relied upon the decision of Shanley J. in Southern Mineral Oil Ltd. (in liquidation) v. Cooney (No. 2) [1999] 1 IR 237. In that case Shanley J. had placed particular reliance on the test propounded by Millet J. in Re Probe Data Systems [1989] B.C.L.C. 561 at p. 563 in relation to the equivalent English rule at p. 247 which concluded that “[t]he mistake must have been a mistake as to the name or identity of the intended party”.

Counsel further submitted that the present application could be distinguished from the facts of Southern Mineral Oil Ltd. (in liquidation) v. Cooney (No. 2) on the basis that there was a genuine mistake as to the name or identity of the intended party.

Furthermore, counsel relied heavily upon the decision of Geoghegan J. in Kennemerland v. Montgomery [2000] 1 ILRM 370. The facts in that case satisfied Geoghegan J. that the proceedings were brought in the name of the wrong plaintiff due to a bona fide error and he accepted the affidavit evidence tendered on behalf of the applicant to that effect.

It was also submitted that the defendants acted at all times on the basis that they were being sued by the entity which owned and operated the Sandy Lane Hotel, i.e. the proposed plaintiff. The defendants did not plead that the plaintiff was not the owner of the Sandy Lane Hotel or its business or that it had no standing to sue.

Counsel submitted that the order sought pursuant to O. 15, r. 2 should be granted by this Court as it was clearly necessary for the proper determination of the real matters in dispute.

Counsel further submitted that the Statute of Limitations 1957 (as amended) could not be successfully invoked by the defendants as a means of defeating this application. It was submitted that it is not appropriate for this Court, at this juncture of the proceedings, to seek to determine the issue of whether or not the Statute of Limitations applies in the event that the proposed plaintiff is substituted for the plaintiff. Counsel argued that estoppel would ultimately arise and bar a defence on the Statute of Limitations on the basis of the clear acceptance by the defendants that they were being sued by the entity which owned and operated the Sandy Lane Hotel, i.e. the proposed plaintiff.

Counsel noted the important distinction between Order 15, rule 2 and Order 15, rule 13. Where a court adds a defendant pursuant to r. 13, the proceedings as against that defendant are deemed only to have begun on the making of the order adding that party as defendant. Therefore, the Statute of Limitations will apply to determine whether or not the plaintiff’s claim against the added defendant is statute barred as at the date of the making of the order adding the defendant. In contradistinction to this, O. 15, r. 2 does not make such a provision. The rationale underpinning the distinction lies in the fact that, in circumstances where the wrong person has been added as plaintiff through a bona fide mistake, the defendant has nonetheless been properly served with proceedings putting him on full notice of the case being made against him and putting him in a position to meet that case. Counsel argued that substituting the proposed plaintiff for the plaintiff ultimately causes no prejudice or injustice to the defendant. The underlying cause of action remains and would remain the same. Furthermore, the interests of justice demand that the error be corrected without the defendant being able to benefit from the “windfall” of a defence on the Statute of Limitations that was not available at the date of the writ.

Counsel referred to the case of Kennemerland v. Montgomery [2000] 1 ILRM 370. In that judgment, Geoghegan J. rejected the submission that he ought not to substitute a new party under O. 15, r. 2 on the grounds that the action at the suit of that new party was statute barred. Geoghegan J. further rejected the defendant’s reliance on the judgment of the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519 as that case concerned an application to add a defendant under O. 15, r. 13 and not under Order 15, rule 2. It was also the expressed view of Geoghegan J. that the Supreme Court in Allied Irish Coal Supplies Ltd. had not intended to, and had not in fact, overruled the earlier Supreme Court judgment in O’Reilly v. Granville [1971] 1 I.R. 90.

Counsel submitted that Clarke J. in Wicklow County Council v. O’Reilly [2006] IEHC 265 correctly summarised the applicable test and considered the distinction between r. 2 and r. 13 of O.15 and concluded that O. 15, r. 2 is concerned with an amendment to the name of a party even if this would have the effect of substituting another party. Such an order could only be made where a bona fide mistake had occurred – where one party sets out to sue X but erroneously describes or names X as Y, with the attendant consequence of suing Y instead of X. The intentions of the person making the mistake are determined in the light of all the surrounding circumstances. Clarke J. concluded that in such circumstances the Statute of Limitations would not apply. The more general jurisdiction of O, 15, r. 13 does not require that a bona fide mistake is established, however the Statute of Limitations will apply in such instances and the date of joinder will be deemed as the date of commencement of the action as against the joint party.

It was submitted that there has been no undue delay on the part of the plaintiff in dealing with the issue of correcting the name of the plaintiff. Upon realising the error, the plaintiff filed a motion in July, 2005 seeking to correct the name of the plaintiff pursuant to Order 63, rule 1 (15). This order was granted by the High Court in November, 2005. In December 2005, the defendants filed a Notice of Appeal against that order. The appeal was heard in the Supreme Court some three and a half years later and the Supreme Court, in allowing the appeal, delivered its reserved judgment in November, 2009. This application was issued promptly thereafter pursuant to Order 15, rule 2. It was the plaintiff’s contention that the facts of this case fall to be considered within O. 15, r. 2, such that the Statute of Limitations does not apply.

SUBMISSIONS OF THE DEFENDANTS
The defendants resisted the application on grounds as follows: first, there was no proper evidence of a mistake as provided for by O. 15, r. 2; second, the proposed new plaintiff’s claim was statute barred under and by virtue of the Statute of Limitations 1957 (as amended), and third, the Court should in any event exercise its discretion not to permit the substitution.

Counsel on behalf of the defendants submitted that the factual circumstances of this case did not evidence any mistake of the type provided for in O. 15, r. 2 of the Rules of the Superior Courts. These proceedings were instituted in the name of the St. Lucia company, a separate legal entity to the Barbados Company which is the proposed plaintiff. It was argued that these are two separate and distinct corporate entities which were incorporated in different jurisdictions. Counsel contended that Mr. Brian O’Sullivan, former company secretary for the plaintiff, must have been aware of this fact and the explanation offered in his affidavit that the omission of the word “Co.” was a simple error ignored the fact that the proceedings were initiated in the name of the St. Lucia company. It was submitted that the identity of the plaintiff was clear throughout and that following the publication of the article in the Sunday Times newspaper, letters of complaint were sent by Mr. O’Sullivan in the name of the plaintiff. Furthermore, the plenary summons identified the plaintiff as a St. Lucia company and the request for security for costs was based expressly on that fact which was not challenged or queried in any way.

Counsel on behalf of the defendants submitted that O. 15, r. 2, like O. 63, r. 1 (15), is inapplicable to the circumstances of this case as the rule cannot be used to correct a mistake as to the actual identity of the party which is sought to be sued. An order sought under O. 15, r. 13 would have been the appropriate order under which to make this application. Such an order would have been a less than satisfactory outcome for the plaintiff as the joinder of a plaintiff under such an order is subject to the relevant limitation period and the defendants relied in this regard on the decision in Southern Mineral Oil Ltd. (in liquidation) v. Cooney (No. 2) [1999] 1 IR 237.

It was further submitted that it would be contrary to the provisions of the Statute of Limitations 1957 (as amended) to permit the substitution of a new plaintiff at this stage of the proceedings and the plaintiff should not be allowed to subvert the Statute of Limitations in this manner. Counsel on behalf of the defendants submitted that, at the upper limit, any cause of action vested in the proposed plaintiff became statute barred on the 1st March, 2004. The defendants relied upon an English line of authority concerning the old English rule which corresponds to O. 15, r. 2 including the decision of the House of Lords in Ketteman v. Hansel Properties Ltd. [1987] 1 A.C. 189 which was relied upon as providing authority for the general principle that when a party is joined to an action he is deemed to be joined as of the date of joinder, i.e. “relation back” does not occur in such an instance. Furthermore, the decision of O’Neill J. in Kinlon v. Córas Iompair Eireann [2005] 4 IR 480 was relied upon as authority that “relation back” does not arise in circumstances where an order joining or substituting a new party is made by the Court.

Counsel on behalf of the defendants argued that the Court should, in any event, exercise its discretion not to permit the substitution on the grounds of delay and drew the Court’s attention to Hardiman J.’s judgment in the Supreme Court appeal in which he stated that:-

“Because of the delay (and there has been gross delay) the defendants might be able to object to the substitution of a new party on the grounds that the statute of limitations has run as against that party. Since this is a separate issue which may well come before the courts, I will say nothing about it. But I would not be prepared to deprive the defendants of the opportunity of raising it.”

DISCUSSION AND DECISION

There are three distinct provisions contained in the Rules of the Superior Courts relating to the alteration of the names of parties to proceedings: Order 63, rule 1 (15), Order 15, rule 2 and Order 15, rule 13. Order 63, rule 1 (15) has already been unsuccessfully invoked by the plaintiff. Of relevance to this particular application are rr. 2 and 13 of Order 15.

Order 15, rule 2 provides that:-

“Where an action has been commenced in the name of the wrong person as plaintiff, or where it is doubtful whether it has been commenced in the name of the right plaintiff, the Court may, if satisfied that it has been so commenced through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms as may be just.”
Order 15, rule 13 provides that:-
“No cause or matter shall be defeated by reason of the misjoinder or non-joinder of parties, and the Court may in every cause or matter deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the names of any parties improperly joined, whether as plaintiffs or as defendants, be struck out and that the names of any parties, whether plaintiffs or defendants, who ought to have been joined, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added….”
A myriad of case law, concerning the application of both r. 2 and r. 13 of O. 15, was opened to this Court. To ensure clarity for the rationale grounding this decision, I propose to deal with this case law and reconcile the apparent divergence between certain seminal judgments relevant to this case. Any such examination of the operation of rr. 2 and 13 of O.15 must commence with an examination of the decision in O’Reilly v. Granville [1971] I.R. 90. That case arose out of the plaintiff’s application to add a second defendant to those proceedings pursuant to Order 15, rule 13 of the Rules of the Superior Courts 1962. The Supreme Court allowed the plaintiff to add the second defendant even though the limitation period had expired as against that defendant.
The subsequent case of Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519 concerned an application for the joinder of co-defendant pursuant to Order 15, rule 13. The High Court held that the co-defendant would not be joined to the action where the claim against it would be statute barred. The Supreme Court, dismissing the appeal, held that the Court could not permit a person to be named as a defendant in an existing action at a time when that person could rely on the Statute of Limitations 1957 (as amended) to bar the plaintiff from bringing a fresh action against him. The Court further held that it had jurisdiction to refuse to add parties for the purpose of introducing a new cause of action. Ultimately, the Supreme Court deemed that the Court had a discretion to order the addition of a new defendant. However, it appears that the decision of O’Reilly v. Granville [1971] I.R. 90 was not considered by either the High Court or the Supreme Court in that case.

In the case of Southern Mineral Oil Ltd. (in liquidation) v. Cooney (No. 2) [1999] 1 IR 237, Shanley J. considered an application to add or substitute parties pursuant to O. 15, rr. 2 and 13. The applicants were companies that had been wound up by order of the High Court. The liquidator had commenced the proceedings in the name of the companies in liquidation on the basis of his belief that this was the correct manner in which to proceed. The applicants applied to have the liquidator substituted as the applicant in the matter. Shanley J., applying Re Probe Data Systems [1989] B.C.L.C. 561, held that the applicant could not be substituted pursuant to O. 15, r. 2 on the basis that the two crucial requirements in order for rule 2 to apply were not evident, namely; (i) that a bona fide mistake had occurred and (ii) this mistake had not misled or caused any doubt as to the identity of the intended plaintiff. Shanley J. observed that, even though a genuine mistake had occurred on behalf of the applicant, this was not a case under r. 2 on the basis that at all material times the respondents understood that the applicants were companies in liquidation and not the liquidator. Shanley J stated at p. 247 that:-

“To now allow an amendment would be to suggest that the respondents at all material times were in no real doubt but that the intended applicant was in fact the liquidator. This is patently not the case and for these reasons liberty to substitute the liquidator for the companies in liquidation pursuant to O. 15, r. 2, will be refused.”
Relying on the decision of the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519, Shanley J. held that the application under r. 13 failed on the basis that the cause of action against the proposed added defendants was statute barred. Of importance was the observation of Shanley J. that the attitude of the Supreme Court in O’Reilly v. Granville [1971] I.R. 90, (i.e. that the Statute of Limitations 1957 (as amended) was a matter for defence and it did not arise until pleaded) had changed since the decision in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519. Shanley J. stated at p. 246 that he felt “bound to follow” the later decision of the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd.
In Kennemerland v. Montgomery [2000] 1 ILRM 370, an application was made pursuant to O. 15, rr. 2 and 13 to substitute the plaintiff in the proceedings. Geoghegan J. in the High Court permitted an amendment under O. 15, r. 2 in circumstances where it was perfectly clear that the defendants, at all material times, knew that the wrong company had been named as a plaintiff. Furthermore, Geoghegan J. noted that the justice of the circumstance required the substitution to be made. Crucially the judgment of Geoghegan J. confronted the apparent divergence between the Supreme Court judgments of O’Reilly v. Granville [1971] I.R. 90 and Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519. In dealing with the decision of Shanley J. in Southern Mineral Oil Ltd. (in liquidation) v. Cooney (No. 2) [1999] 1 IR 237, Geoghegan J. stated that:-

“I think it highly unlikely that the Supreme Court in Allied Irish Coal would have been intending to overrule O’Reilly -v- Granville without actually saying so, particularly having regard to the detailed analytical judgments in that case. I think therefore that Allied Irish Coal Supplies -v- Powell Duffryn International Fuels Limited is simply a restatement of a long established principle that a Court will not add a defendant under Order 15 Rule 13 if the action is quite clearly statute barred. I do not think that it can be taken as authority for the proposition that if there is doubt as to whether a plea of the statute would be successful or not, the Court making the decision as to whether to join the additional party or not has to there and then decide the statute bar issue and accede to or refuse the application accordingly. But at any rate I do not think that the principles which apply in relation to an application under Order 15 r. 13 necessarily apply equally to an application under Order 15 r. 2.”
Therefore, it was the clear opinion of Geoghegan J. that the decision of the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519 did not overrule the decision in O’Reilly v. Granville [1971] I.R. 90. Furthermore, Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. was simply a restatement of a long established principle that a court will not add a defendant under O. 15, r. 13 if the action is quite clearly statute barred. It was held that the determination of a claim as being statute barred involved a consideration of numerous issues and it would be inappropriate to determine the issue at that stage of the proceedings. Whilst it was noted that the principles that govern applications under O.15, r. 13 do not necessarily apply to applications under O.15, r. 2, Geoghegan J. stated that where an application is made pursuant to r. 2, the court has a discretion to refuse the order sought in cases where the action is clearly statute barred beyond any doubt and it would be futile to do so. Geoghegan J. deemed that this was not such a case and accordingly deferred the limitation issue in that matter.
In Kinlon v. Córas Iompair Eireann [2005] 4 IR 480, O’Neill J. in the High Court also considered the judgment of Shanley J. in Southern Mineral Oil Limited (in liquidation) v. Cooney (No. 2) [1999] 1 IR 237 and the consequent apparent divergence in the Supreme Court judgments of O’Reilly v. Granville [1971] I.R. 90 and Allied Irish Coals Supplies Ltd. v. Powell Duffryn International Fuels Ltd. [1998] 2 IR 519. As already noted, Shanley J. expressed the view that he was “bound to follow” the later decision of the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. O’Neill J. disagreed with Shanley J. in relation to this point on the basis that in Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd. the case of O’Reilly v. Granville was not cited to either the High Court or the Supreme Court. O’Neill J. stated at p. 492 that:-

“It would appear to me that since O’Reilly v. Granville [1971] I.R. 90 does not appear to have been considered by the Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn Intl. Fuels Ltd. [1998] 2 IR 519 and expressly disapproved, it remains good law and insofar as I find myself with two conflicting Supreme Court authorities, I am inclined to prefer the reasoning of O’Reilly v. Granville.”
The decision of Clarke J. in Hynes v. The Western Health Board [2006] IEHC 55 and Wicklow County Council v. O’Reilly & Others [2006] IEHC 265 followed this line of authority and concluded that the authoritative decision on this issue was that of O’Reilly v. Granville [1971] I.R. 90.
Order 15, rule 2 makes provision for instances where an action has been commenced in the name of the wrong person as a plaintiff; it can be accurately summarised as being the rule governing the substitution of parties. I am mindful that r. 2 of O. 15 is imbued with its own limitations. The Court must be satisfied that the mistake was bona fide and that the order for substitution pursuant to r. 2 is necessary for the determination of the real matter in dispute. Also, an order pursuant to O. 15, r. 2 will not be made where to do so would constitute a new action (see Southern Mineral Oil Ltd.(in liquidation) v. Cooney (No. 2) [1999] 1 IR 237) .

Order 15, rule 13 concerns the procedure for adding, substituting or striking out a party. The names of any parties may be added, whether plaintiffs or defendants, who ought to have been joined, or “whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter”.

There are, however, two important distinctions between Order 15, rule 2 and Order 15, rule 13. First, in relation to r. 13, it is not necessary for the applicant to establish that a bona fide mistake occurred. Secondly, where a court makes an order pursuant to O. 15, r. 13 the proceedings against the new party are deemed to have commenced only on the date of the making of the order adding that party. This may, therefore, have significant implications concerning the computation of the relevant limitation period in accordance with the Statute of Limitations 1957 (as amended). Order 15, rule 2 does not contain such a provision, however, it nonetheless contains the requirement that the mistake be one of a bona fide nature.

These proceedings have been commenced in the name of the wrong person as plaintiff. This Court is satisfied that the mistake which occurred in the naming of the plaintiff was indeed a bona fide mistake. In this respect the plaintiff has crossed the first hurdle in relation to the application of Order 15, rule 2. The second hurdle which has been identified, and is set out in r.2, is that it must be shown that an order mandating the addition or substitution of a plaintiff is “necessary for the determination of the real matter in dispute”. This Court is fully satisfied that this criterion also has been fulfilled in this instance. The third hurdle, which has been identified by the case law cited above, is to inquire whether the underlying cause of action remains the same. This is the case in this instance. The final hurdle which the plaintiff must satisfy is that should the Court grant the order sought pursuant to O. 15, r. 2, no prejudice or injustice will fall upon the defendant. It is this Court’s view that the defendants were properly served with proceedings and put on full notice of the case being made against them. The defendants will suffer no prejudice or injustice in this instance by this Court granting such an order. On the basis of the clarification of precedent case law, I am satisfied that the judgment in O’Reilly v. Granville [1971] I.R. 90 represents the authoritative case law on this point. (See also the decisions in Kennemerland v. Montgomery [2000] 1 ILRM 370, Kinlon v. Córas Iompair Eireann [2005] 4 IR 480, Wicklow County Council v. O’Reilly [2006] IEHC 265 and Hynes v. The Western Health Board & Anor. [2006] IEHC 55.)

I am satisfied that there is ample authority for concluding that relief should be granted on facts such as have arisen in this case. As to the Statute of Limitations issue, this Court declines to exercise its discretion to refuse to make the order pursuant to r.2 on the basis that the claim is statute barred and futile in practice. This is not such a case. I will therefore grant that the amendment sought be allowed pursuant to Order 15, rule 2 of the Rules of the Superior Courts.

 

M -v- The Minister for Justice & Equality & ors

[2018] IESC 7 (07 February 2018)

Ruling
Title:
M -v- The Minister for Justice & Equality & ors
Neutral Citation:
[2018] IESC 7
Supreme Court Record Number:
61/17
High Court Record Number:
2015 436 JR
Date of Delivery:
07/02/2018
Court:
Supreme Court
Composition of Court:
O’Donnell Donal J., McKechnie J., Dunne J.
Ruling by:
O’Donnell Donal J.
Status:
Approved
Result:
Other

SUPREME COURT
61/17

O’Donnell J
McKechnie J
Dunne J
Between:
IRM, Sarah Jane Rogers, and
SOM (A Minor Suing by her Father and Next Friend IRM)

Respondent/Applicants
AND
Minister for Justice and Equality, Ireland and Attorney General

Appellants

Ruling of Court delivered by O’Donnell J on the 7th day of February 2018.
1 This is the Courts ruling on an application made on behalf of an entity known as the Pro Life Campaign to be permitted to participate as an amicus curiae in the hearing of this appeal which is due to take place in this Court on the 21st and 22nd of this month. Given the imminence of the hearing date, time was abridged for the giving of notice to the parties to the appeal. The application was made by motion issued on the 5th of this month, was heard yesterday, and a ruling is delivered today.

2 The proceedings themselves concern an appeal pursuant to Article 34.5.4 of the Constitution inserted by the 33rd Amendment which permits an appeal, known as a “leapfrog appeal” direct from a decision of the High Court to this Court. The decision of the High Court in question was delivered on the 29th of July 2016. It will be necessary to consider the detail of what is involved in that decision and consequently in this appeal, in a little more detail later. It is enough at this point to say that in those proceedings, the High Court concluded that the respondent Minister for Justice and Equality was obliged, when considering an application for revocation of a deportation order made pursuant to s.3(11) of the Immigration Act 1999, to take into account the position of any child of the applicant for revocation unborn at the time of the application.

3 The application to participate in this appeal is grounded upon an affidavit of Cora Sherlock who states that the Pro Life Campaign is the trading name of a company VIE Limited which is a company limited by guarantee incorporated in 1993. She says that the founding members of the company were members of the Pro Life Amendment Campaign who campaigned for the introduction of the Eighth Amendment to the Constitution which inserted Article 40.3.3 in to the Constitution. She says also that among the stated objects of the company is the prevention of the decriminalisation of abortion and the promotion of the existence and value of human life from the moment of conception. Ms Sherlock states that the campaign has consultant status at the United Nations Economic and Social Council. At paragraph 41 of her affidavit it is stated that the Pro Life Campaign has amassed a considerable body of expertise in the various fields, medical, social and legal, that touch on the rights of the unborn child in the womb, and number among its legal advisors a named distinguished legal expert. None of this information about the background of the company is sought to be contradicted by the replying affidavit of Ross Murphy on behalf of the State parties, save that it is observed that more than 4,500 organisations are listed as having consultant status to the United Nations Economic and Social Council.

4 The affidavit of Ms Sherlock also makes reference to the procedural history of the case, the decision of the High Court, the appeal to the Court of Appeal and the application to this Court for leapfrog appeal. The affidavit also makes general reference to some public statements of the Taoiseach and the apparent intention to hold a referendum on a proposal to be put to the People in relation to Article 40.3.3. To paraphrase the affidavit and oral submissions of counsel on behalf of the Pro Life Campaign, we hope not unfairly, some concerns are expressed as to the desire apparently publicly attributed to what are described as “sources familiar with government discussions” that there should be in the forthcoming appeal a comprehensive adjudication by this Court that Article 40.3.3 embodies the totality of rights of the unborn. Further concern is expressed about an alleged or perceived disparity of resources between the existing parties, the fact that the application for direct appeal was acceded to by this Court, and a timetable set for an early hearing this month. While not seeking to question in any way the integrity of the lawyers acting on behalf of the respondent parties it is nevertheless contended that these matters put those lawyers in an invidious position. Concern is expressed therefore that the interests of the unborn child could be “overwhelmed by the desire of the government to adhere to a particular timetable or approach matters in particular ways”. Accordingly permission is sought to join this appeal as an amicus curiae in order to “support and if necessary amplify” the arguments that might be made by counsel for the respondent. We hope that this sets out fairly the burden of what has been advanced on behalf of the applicant.
Referendum
5 It is necessary to recognise immediately that this application cannot be viewed in isolation from the references made to the proposal for a referendum in relation to Article 40.3.3. It was of course partly because of the imminence of that proposal that the State parties for their part sought an early hearing of this appeal, and indeed why that application was acceded to by the Chief Justice. For her part, Ms Sherlock’s affidavit makes repeated references to the proposal for an amendment to that Article and some public discussion and commentary in relation to it.

6 It is important therefore to address one factor at the very outset of this application. It is of course not unknown for broadly political issues to become the subject matter of proceedings in court. By the same token sometimes court decisions become the source of political controversy. In the particular area of constitutional adjudication, this is particularly so. It is the function and duty of courts to uphold the Constitution. This necessarily means that courts must interpret the Constitution. When proposals are made to change the Constitution through the referendum process under Article 46 of the Constitution, discussion often centres around the interpretation given by courts to the existing provisions of the Constitution which are sought to be amended, and indeed the interpretation likely to be given to provisions sought to be inserted.

7 To this extent there may occasionally be significant areas of proximity, intersection and even overlap, between the issues discussed and decided in the political and public arena in the context of amendment of the Constitution on the one hand, and those matters which are addressed in court proceedings on the other. But it is very important then to understand that there are however very significant differences in the process in each forum, which flow from the Constitution itself, and the position it accords to the Courts and the duty it imposes upon them, the constitutional recognition of the political process, and perhaps most importantly the constitutional role of the People, in particular when engaged in a referendum process when in the words of Article 6 they decide in final appeal questions of national policy.

8 A court is not free to make observations in general on social, political or even legal issues. Courts may only decide on litigation between parties and on those issues which those parties brought to the court for a determination. The only issues the court can decide are the issues which are necessary in order to resolve the litigation between the parties and that is the only part of the court decision which is binding on other courts and which can be said to have effect beyond the particular case. Inevitably some decisions of the courts will have wider implications, and that can indeed be a desirable feature, but it is important to understand that a central and distinctive feature of the court’s function is to decide the law only within the specific context of the litigation before it and for the purposes of deciding that case.

9 It follows that it is not the function of the court to give advisory opinions or to offer views on matters unconnected to the issues before it. If the decision of the court clarifies the legal provision for others then that is of course useful, but that is a consequence of the court deciding the case before it, and explaining its reasons for so deciding. If the observations made by the court in doing so assist others or hinder them, or bring clarity or confusion, then that is still a consequence of the decision, and not an object in itself. It is also of course the case that if there is particular urgency in a matter and it was obviously desirable that there is an early hearing, then courts will attempt to accommodate the interests of justice in that regard. That is a component of the administration of justice. But there remains the fundamental duty on the court to administer justice between the parties before it. If therefore it was apparent that one party was not in a position to proceed, or was significantly disadvantaged, so that justice could not be done, then a court which is obliged to uphold the Constitution and to administer justice, would have to take steps to ensure that case could be properly and fairly heard and justice done. By the same token, while a court may attempt to provide decisions in early course, in order to address matters which are plainly urgent, there can be no question of a court hearing a case according to some predetermined timetable and before justice can be done, or issuing judgment before a case has been properly resolved. The core function of a court is to administer justice by deciding the litigation before it.

10 With that focus in mind it is necessary to consider what is in issue in these particular proceedings which the Applicant here seeks to join. It is important to recall therefore, that these are immigration proceedings. In particular they arise in the context of the application on behalf of the first named applicant who I will call for ease of reference the father, for revocation of a deportation order under s.3(11) of the 1999 Act. The father argued that the Minister was obliged to take into account the fact that the second named applicant, his partner, was pregnant and which pregnancy ultimately resulted in the birth of the third named applicant, their daughter. The Minister for Justice and Equality for her part argued that she did not have to consider the pregnancy or the rights or interests of the child not yet born. The High Court judge decided among other things that Article 40.3.3 guaranteeing the equal right to life of the unborn was not an exhaustive statement of the constitutional protection of the unborn, that an unborn child was to be considered a child for the purposes of the then recently inserted Article 42A of the Constitution, and furthermore that the three applicants together were entitled to be treated as a family and to benefit from the rights of a family under the Constitution, although the first and second named applicants were not married to each other. Accordingly, the applicants succeeded and the State appealed that decision, initially to the Court of Appeal.

11 The High Court judgment was delivered in July 2016, and was recognised as having potentially wide ranging implications, not by any means limited to the field of immigration important though that is. It is worth noting however that no application was made in the immediate aftermath of the delivery of the judgment, or in the period thereafter, to join the proceedings notwithstanding any general interest in, or expertise about, the legal status to be accorded to unborn children in pregnancy. It is therefore we think a reasonable, indeed almost unavoidable, inference that this application is precipitated by the increased discussion of the case in the context of the forthcoming proposed referendum to which Ms Sherlock makes reference.

12 That should not be surprising. The potential intersection between the wide ranging decision of the High Court in relation to the constitutional status of the unborn, and the subject matter of any referendum in relation to Article 40.3.3 is obvious. Furthermore, as long as the decision of the High Court is under appeal, there is inevitable uncertainty about the correctness of what that court has decided, and the observations made. Both parties to this appeal accepted, as we understand it, that the appeal was both a matter of general public importance which meant that the general threshold for appeal to this Court was met, and moreover that the circumstances for a leapfrog appeal under Article 34.5.4 were satisfied. In those circumstances the application made by the State parties for an early hearing of the appeal made obvious sense and was acceded to by the court. If the People of Ireland are to asked to change their basic law, it is at a minimum desirable that, if possible, there should not be avoidable uncertainty about what that law is. It is of course possible that the outcome of this appeal may not be to the satisfaction of any or all of the parties, may not result in greater certainty, or may indeed give rise to other unanticipated issues, but there was a clear public interest in the court hearing the appeal.
The Law
13 There is little dispute about the applicable law governing this application. It is accepted that permitting a person to intervene in proceedings and address the court as an amicus curiae is a matter within the discretion of the court. The fundamental question to be addressed in each case is whether the Court is likely to be assisted significantly by the intervention offered. It is also acknowledged that the fact that a party has no official recognition and is not conferred with public functions in a particular area, and may moreover have partisan views on a topic, are factors which tend against permitting against intervention. It is also accepted fairly on behalf of the applicant that those factors are present in this case. However it is also the case that significant expertise and knowledge are important factors, and realistically it must be acknowledged that any party who is sufficiently interested to seek to intervene may well have strong views about the outcome he, she or it wishes to contend for. The court must weigh all those factors, in the context of the issues arising in the case, and the disposition and attitude of the parties. Furthermore, it is right to recognise as the State parties do in their affidavit, that non governmental organisations, and voluntary organisations play an important role in civil society, albeit it is also observed that the fact that such organisations occupy a role of public debate should not be conflated with an entitlement to be necessarily joined to proceedings such as the present.

14 In the exercise of this court’s discretion it is necessary again to focus very clearly on the precise issue to be determined at this stage. What is before this Court is a pure issue of law. No question of any medical or social issue falls to be determined. The only expertise in issue is legal. Here however the parties are legally represented. In particular the respondents to the appeal whose submissions the applicants seek to “support and if necessary amplify”, are represented by an experienced legal team. Furthermore the core of that team was involved in the High Court hearing, and in all the proceedings thereafter, and succeeded on the legal argument in the High Court. They are therefore particularly familiar with the argument and the manner in which it intersects with the facts of this case. Indeed, insomuch as the precise issue raised here is the interests of a child as yet unborn, and of her father who is subject to a deportation order, then clearly the third named applicant here can raise those issues precisely, since she was the child in that position herself, who gave rise to the High Court judgment. It is of particular significance therefore that counsel for the respondents, while taking a neutral stance on the question of the application to be permitted participate as amicus curiae, clearly disavowed any suggestion that the legal team on behalf of the respondents considered themselves at any disadvantage because of the manner in which the case had been advanced. Nor is there any concern about resources in this case, the State having agreed to be responsible for the respondent’s costs. Furthermore, it was made very clear that the lawyers on behalf of the respondent had a clear understanding of the full extent of the obligation that lay upon them to make all arguments that could properly be made in support of the High Court judgment which had been given in favour of their respondent. By extension it should be said that if indeed competent lawyers retained on behalf of the respondent considered that they were at a disadvantage such that justice could not be done to the argument they sought to advance, then it would follow that they would be under an obligation to bring that to the attention of the court. If the court was satisfied that to proceed with the hearing would be unfair, then the court in turn would be obliged to take appropriate steps to ensure that justice could be done. Again, it is important therefore to observe that the respondents’ lawyers made no such submission, and did not suggest that they needed, or could benefit from the “support or if necessary amplification” being offered by the applicant in this litigation. On this aspect it is clear that the concerns expressed that the respondent’s team might be unprepared, outgunned, lacking either in resources or in the real commitment a fully fought case creates, or disadvantaged by the timescale of the appeal, can all be discounted.

15 Counsel on behalf of the Pro Life Campaign did not identify any particular legal argument which he wished to make or thought that the Pro Life Campaign could make to particular effect. This is not surprising. There are obvious constraints on any party who seeks to intervene in litigation. By definition the only arguments that can be advanced, are those which properly arise in the appeal and normally those which were made in the court below. We recognise that a prospective intervening party may always feel that it could put the same point better, or in a different way, and furthermore that there is some value to be attributed to the fact that a party genuinely interested has the satisfaction of knowing that it has advanced its own argument. However it must be concluded in this regard, that insofar as it is possible to make an assessment of these matters, no measurable concern has been established to the satisfaction of the court which would suggest that the full range of argument will not be made, or made skilfully and forcefully, on the issues of law that properly arise on this appeal. Accordingly it seems that the assistance that can be offered at this stage is minimal. Even then there may be cases where an even remote possibility of assistance could justify permitting a person to address the court as an amicus curiae or at least to make brief written submissions, particularly if the issue was complex or novel and there was no possible disadvantage to such a course. In this case however, in our judgment there are notable disadvantages to this course, and which significantly outweigh any benefit to be obtained. The application in relation to this case is not being made as of July 2016 when the High Court delivered judgment or shortly thereafter when the State parties lodged their appeal. Instead it is clearly being made against the background an incipient campaign in relation to a referendum. The interest of the potential amicus curiae in this case, relates to the position of the constitutional position of the unborn. That is not the only issue in the appeal. Moreover, the proposed applicant in this case is by no means the only group, entity or body which is concerned with that issue. It is well known that there is a wide spectrum of views and a significant number of groups, organisations, and think tanks who have particular interest in and views upon the topic. Many of these groups are likely to participate in the referendum campaign. While it is fair to say that no other group has yet emerged in the context of these proceedings, the application in this case was brought at very short notice. If this applicant, admittedly partisan, is permitted to participate in the appeal, it would become significantly more difficult to reject any subsequent application from other groups, entities, or individuals, who wished to “support and if necessary amplify” arguments on one or other side. This would create obvious logistical difficulties, and at an extreme could give rise to a significant risk of the case being delayed or postponed even though the principal parties were in a position to proceed. In addition, and more significantly in our view, is the fact that all such arguments would necessarily tend towards general arguments, unmoored from the specific contentions in this case. That in turn would likely lead to a blurring of the distinction between legal argument and broader arguments that might be advanced at the level of policy. It also cannot be ignored that admission to these proceedings and the making of submissions with the likely publicity which may attach may itself have an impact in the broader sphere. All of this, if it were to ensue, would significantly blur the important, indeed critical, distinction we have already adverted to, at the outset of this ruling and central to the constitutional function of the court. This would not help, and might well hinder, the court in addressing the important issues arising which are necessary for determination in order to resolve the particular dispute raised in this case. Even if the only applicant seeking admission to the case was the present applicant the consideration would still have force. The desire to advance arguments of more general application consistent with a group’s generally expressed views, would exert a gravitational pull away from the particular issues in this case and towards more general matters of public controversy and accordingly away from the court’s central function. In all the circumstances of this case, and the point it has reached, we would dismiss the application to be admitted to the proceedings. For our part we are not satisfied that the issues which this Court should itself properly address in this appeal cannot properly, adequately, and perhaps best, be advanced by the existing parties to these proceedings.

 

 

 

 

 

Start Mortgages dac v Kavanagh & anor

[2019] IEHC 216 (11 April 2019)

DEFENDANTS

JUDGMENT of Mr. Justice Garrett Simons delivered on 11 April 2019.
INTRODUCTION
1. This judgment addresses a net point of practice and procedure as follows. What procedural steps, if any, must a company, which has changed its status from a limited liability company to a designated activity company, take to reflect this change in status in legal proceedings. In particular, is it necessary for the company to make a formal application to court to amend the title of the proceedings.

2. On the facts of the present case, the title of the proceedings was amended pursuant to Order 17, rule 4 of the Rules of the Superior Courts to reflect the change in status of the plaintiff company. This order was made pursuant to an ex parte application moved on behalf of the plaintiff company. The first named defendant, Mr. Simon Kavanagh, has since applied to discharge this order. The grounds relied upon include (i) an argument that the plaintiff company ceased to exist and that the designated activity company is a new company, and (ii) an argument that the title of proceedings cannot be changed in circumstances where a final order, i.e. an order for possession, had already been made in the proceedings.

3. For the reasons set out hereinafter, I am satisfied that the objections made by Mr. Kavanagh are untenable. On the facts of the present case, the order amending the title of the proceedings was properly made. The court has an inherent jurisdiction to amend the title of proceedings to reflect the fact that the status of a company has changed. This amendment can be made at any time. The making of such an amendment causes no prejudice to any of the other parties to the proceedings. The only variation which I propose to make to the order is to recite that the order is made pursuant to the inherent jurisdiction of the court (rather than pursuant to Order 17, rule 4).

4. More generally, I am of the view that, strictly speaking, it is not necessary for a company to make a formal application to court to reflect its change of status from a limited liability company to a designated activity company. The legal entitlement to continue proceedings following the change in status of a company is expressly provided for under Section 63(12) of the Companies Act 2014, and this provision appears to be self executing. (See, by analogy, First Active plc v. Cunningham [2018] IESC 11). Of course, if a company does make a formal application to court—whether out of an abundance of caution or otherwise—then the court has an inherent jurisdiction to amend the title of proceedings.
PROCEDURAL HISTORY
5. The within proceedings were instituted by way of Special Summons in 2013. The proceedings ultimately came on for hearing before the High Court (Hedigan J.) on 18 July 2016. The High Court made the following order on that date.

“IT IS ORDERED that the Defendants do forthwith upon service of this Order upon them deliver up to the Plaintiff or to some person duly authorised by it in writing in that behalf possession of ALL THAT and THOSE the plot of ground part of the lands of Enniscorthy situate in the Barony of Scarawalsh and County of Wexford now Known as Site no. 15 Parklands, Enniscorthy in the County of Wexford, more particularly the subject matter of Deed of Conveyance dated 1st September 1988 – between Lacey Brothers Limited to Simon Kavanagh and Deirdre Kavanagh.”
6. A nine-month stay on execution was placed on the order. The costs of the proceedings were awarded to the Plaintiff.
7. Start Mortgages Ltd. subsequently converted to a designated activity company on 21 October 2016. The Certificate of Incorporation on Conversion to a Designated Activity Company has been exhibited in the affidavit of Ms. Eva McCarthy sworn herein on 28 March 2018.

8. On 26 February 2018, an ex parte application was made on behalf of the plaintiff company seeking, in effect, to amend the title of the proceedings. The application was put forward on alternative bases, namely (i) Order 17, rule 4; (ii) the court’s inherent jurisdiction, or (iii) pursuant to Section 63 of the Companies Act 2014.

9. It should be noted that this application took the form of an “omnibus” application, whereby the plaintiff company relied on an affidavit and ex parte docket filed in one set of proceedings (Start Mortgages Ltd. v. Ryan Record Number 2008 No. 26 SP) to ground an application to amend a total of twelve sets of High Court proceedings. These proceedings were identified in an exhibit to the grounding affidavit of Gill Cotter sworn on 13 February 2018 filed in the Ryan proceedings. As discussed presently, the fact that the application was an “omnibus” application meant that there was no grounding affidavit filed on the court file in the within proceedings.

10. The ex parte application was moved before the High Court (Meenan J.) on 26 February 2018. The following order was made.

“IT IS ORDERED pursuant to Order 17 Rule 4 of the Rules of the Superior Courts that the within proceedings herein be amended so as to disclose the correct title of the Plaintiff to read ‘Start Mortgages Designated Activity Company’ a change and/or transmission of interest having taken place after the commencement of the said proceedings
And IT IS ORDERED that the within proceedings shall be carried on between the continuing party and the said Start Mortgages Designated Activity Company

The title hereof to be duly entered in the Central Office of the High Court with the proper officer.”

11. The order was perfected on 31 March 2018. There was a clerical error in the original version of the order in that it mistakenly described the second named defendant as Deirdre Murphy rather than Deirdre Kavanagh. This clerical error was subsequently corrected on 9 April 2018, and this is recorded on the amended order as follows.
“Amended pursuant to O.28 R 11 RSC as amended by S I 271 of 2009
9th April 2018.”

12. Subsequently an order for substituted service was made ex parte on 8 October 2018.
13. The first named defendant, Mr. Simon Kavanagh, issued a Notice of Motion dated 13 November 2018, seeking the following principal relief.

“An Order pursuant to Order 17 Rule 6 discharging or varying the Order of the 26th day of February 2018 perfected 23rd March 2018 and served by covering letter dated the 30th October 2018 and received on the 2nd November 2018.”
14. This application was grounded upon an affidavit of Mr. Kavanagh dated 13 November 2018. Thereafter, there was an exchange of affidavits between the parties. The matter came on for hearing before me on Monday, 25 February 2019. The plaintiff company was represented by Mr. Rudi Neuman, B.L., and Mr. Kavanagh appeared as a litigant in person.
SECTION 63, COMPANIES ACT 2014
15. The procedure for the re-registration by an existing private company as a designated activity company is prescribed under Section 63 of the Companies Act 2014. Relevantly, subsection 63(12) expressly addresses the legal effect of a change in status on legal proceedings, as follows.

“(12) The re-registration of an existing private company as a designated activity company pursuant to this Chapter shall not affect any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings which might have been continued or commenced against it in its former status may be continued or commenced against it in its new status.”
16. The provisions of Section 63(12) were relied upon by the High Court (Eagar J.) in Launceston Property Finance Ltd. v. Burke [2018] IEHC 552 to justify the court in making an order amending the title of proceedings to reflect the change in status of the plaintiff company in that case.
17. The statutory language under subsection 63(12) indicates that the change in status does not render “defective” any legal proceedings by or against the company. The use of the term “defective” is significant in that the relevant Rules of the Superior Courts which allow for the amendment of proceedings often refer to defects or errors as necessitating the amendment. For example, Order 28, rule 12, which is sometimes used to amend the title of proceedings, allows a court to amend any defect or error in any proceedings. Section 63(12) makes it clear that the change in status does not give rise to a defect in the existing proceedings.

18. Crucially, Section 63(12) provides that the proceedings may be “continued” by or against the company in its new status. This indicates that the provisions of subsection 63(12) are self-executing. There is no requirement to amend any “defect” in the title to the proceedings or to substitute a new party. Rather the proceedings simply continue by or against the company in its new status.

19. Given the clear terms of subsection 63(12), I am of the view that, strictly speaking, it is unnecessary for a company to make a formal application to court to amend the title of proceedings to reflect the change in status of the company.

20. Moreover, I am satisfied that if, out of an abundance of caution, a company wishes to copper fasten the position in this regard, an ex parte application can be made to court. The court’s inherent jurisdiction allows it to make an order amending the title of proceedings.

21. In this regard, a loose analogy might be drawn with the approach taken by the Supreme Court in First Active plc v. Cunningham [2018] IESC 11. On the facts of Cunningham , there had been a transfer of the banking business of First Active plc to Ulster Bank Ireland Ltd. This transfer had been made pursuant to the special statutory mechanism for the transfer of the business and assets of a licensed bank or other financial institution provided for under Part III of the Central Bank Act 1971. The legal effect of such a transfer on existing legal proceedings is regulated by Section 41 of the Central Bank Act 1971 as follows.

“41. Where, immediately before the transfer date, any legal proceedings are pending to which the transferor is a party and the proceedings have reference to the business agreed to be transferred, the name of the transferee shall on the transfer date be substituted for that of the transferor and the proceedings shall not abate by reason of such substitution.”
22. On the facts of Cunningham , this transfer had taken place prior to the hearing in the High Court which had resulted in the judgment under appeal, but the High Court had not been notified of the transfer. The appellant sought to argue that the consequence of a failure to apply to substitute Ulster Bank Ireland Ltd. as plaintiff was that the proceedings were, and remained, improperly constituted. In particular, it was alleged, first, that the hearing was irregular; secondly, that the case had been prosecuted by a party with no interest in the outcome; thirdly, that a decree was obtained by a party with no entitlement to same; and fourthly, that a stay had been refused on the basis of undertakings given by First Active plc, thereby rendering the undertakings meaningless as First Active plc was not in fact a party.
23. The Supreme Court rejected these arguments by reference to Section 41 of the Central Bank Act 1971 (set out above). See paragraphs [25] to [28] of the judgment as follows.

“25. It is apparent, therefore, that much will turn on the proper interpretation of the statutory provision in question. Section 41 of the 1971 Act, said in the marginal note to concern the continuance of pending legal proceedings, provides as follows:

‘41.- Where, immediately before the transfer date, any legal proceedings are pending to which the transferor is a party and the proceedings have reference to the business agreed to be transferred, the name of the transferee shall on the transfer date be substitute d for that of the transferor and the proceedings shall not abate by reason of such substitution.’ (Emphasis added)’

26. The different constructions, it seems to be me, centre on the proper interpretation of the emphasised portion of the text. Undoubtedly there are different meanings that may be attributed to the word ‘shall’. For the respondent, the use of this word means that the process is mandatory and automatic. It leaves no uncertainty as to what is to occur or when it is to occur: no application under the Rules is necessary because the substitution has already occurred automatically as a result of the operation of the section. However, the appellant disputes that this is so, maintaining that an application for substitution under the Rules is required. Under this reading, ‘shall’ is to be construed as a command to the parties to take action to effect the substitution, rather than indicating an unavoidable and inevitable substitution that operates independent of the taking of any procedural step by the parties.
27. This section must be viewed as being ancillary to the substantive provisions of section 33 of the 1971 Act, and in this case S.I. 481/2009, by which the business transfer was effected. Section 41 does not disturb or affect the underlying rights and/or obligations of the parties to the relevant proceedings. Its single aim is to regularise the title of extant legal proceedings for administrative purposes. In my view, effect is given to the intended purpose of the section by permitting such change to be brought about in as procedurally straightforward and simple a manner as the provision itself permits. Accordingly, despite the appellant’s arguments to the contrary, I am of the view that the proper construction of the section is that the substitution of the title of the proceedings occurs automatically. Thus without more, i.e. by automatic process, at least for the purpose of the business transaction, the substitution in respect of legal proceedings is concluded. Indeed it is not clear that the appellant disputes this interpretation, but rather maintains that an application to the Court is nonetheless required to regularise the proceedings. I cannot agree. As the substitution occurs pursuant to statute, it obviates the need for a formal application under the Rules of the Superior Courts, for of course the 1971 Act cannot be subordinated to the Rules (see, for example, Luby v. McMahon [2003] 4 I.R. 133). Thus, as a matter of substantive law the name of Ulster Bank was substituted for that of First Active as of the date of the transfer, and accordingly the subsequent judgments and orders stand to be read in favour of Ulster Bank. This is plain meaning of the section and the natural consequence of the statutory process therein described.

28. However, even if as a matter of substantive law the transfer was effected automatically by operation of section 41, it is undoubtedly the case that a situation such as occurred in this case could give rise to potential difficulties such as those outlined in paras. 16 and 18, supra, if the same is not brought to the attention of the trial judge and the record altered to reflect the new circumstances. The step which I have in mind would not require a formal application under the Rules; I am entirely satisfied that had the respondent simply notified the trial judge of the transfer, the requisite name change to the title of the proceedings could, and would have had to, have been made there and then. This ought to have been done and of itself would have been sufficient to bring the identity of the party seeking to recover on foot of the guarantee to the attention of the judge, the court registry, the appellant and those members of the public with an interest. However, this course was not followed, with the respondent attributing its failure to do so to inadvertence. Whilst acknowledging that this fact is ‘unfortunate’, it maintains that such failure has no consequences for the judgment so obtained.”

24. Whereas the statutory language employed under Section 41 of the Central Bank Act 1971 is, obviously, very different from that employed under Section 63(12) of the Companies Act 2014, the approach of the Supreme Court nevertheless has some resonance with the present case. In each instance, the effect on legal proceedings of a change in the status or identity of a litigant is regulated by primary legislation. This primary legislation must prevail over any rule of court. The judgment in Cunningham emphasises that regard should be had to the legislative intent underlying such provisions, i.e. to regularise the title of extant legal proceedings for administrative purposes, and that a purposive interpretation requires that such change be brought about in as procedurally straightforward and simple a manner as the provision itself permits.
25. It should also be noted that the change in the present case is less significant than the change at issue in Cunningham . More specifically, on the facts of Cunningham the identity of the plaintiff had changed from First Active plc to Ulster Bank Ireland Ltd. By contrast, the identity of the plaintiff has remained the same in the present proceedings. The only change is in the status of the plaintiff company.
ORDER 17
26. The ex parte order of 26 February 2018 recites that the order was made pursuant to Order 17, rule 4. The relevant parts of Order 17 read as follows.

“1. A cause or matter shall not become abated by reason of the death, or bankruptcy of any of the parties, if the cause of action survive or continue, and shall not become defective by the assignment, creation, or devolution of any estate or title pendente lite; and, whether the cause of action survives or not, there shall be no abatement by reason of the death of either party between the verdict or finding of the issues of fact and the judgement; but judgement may in such case be entered, notwithstanding the death.
[…]

4. Where by reason of death or bankruptcy, or any other event * occurring after the commencement of a cause or matter and causing a change or transmission of interest or liability ,* or by reason of any person interested coming into existence after the commencement of the cause or matter, it becomes necessary or desirable that any person not already a party should be made a party, or that any person already a party should be made a party in another capacity, an order that the proceedings shall be carried on between the continuing parties, and such new party or parties, may be obtained ex parte on application to the Court upon an allegation of such change, or transmission of interest or liability, or of such person interested having come into existence.

5. An order obtained as in rule 4 mentioned shall, unless the Court shall otherwise direct, be served upon the continuing party or parties, or their solicitors, and also upon each such new party, unless the person making the application be himself the only new party, and the order shall from the time of such service, subject nevertheless to rules 6 and 7, be binding on the persons served therewith, and every person served therewith who is not already a party to the cause or matter shall be bound to enter an appearance thereto within the same time and in the same manner as if he had been served with a summons.

6. Where any person who is under no disability, or, being under any disability, has a guardian ad litem in the cause or matter, shall be served with such order as in rule 4 mentioned, such person may apply to the Court to discharge or vary such order at any time within twelve days from the service thereof.

*Emphasis (italics) added.

27. As appears, whereas Order 17 is principally concerned with a change or transmission of interest or liability arising as a result of death or bankruptcy, rule 4 does also refer to “any other event”. The learned authors of Delany and McGrath on Civil Procedure (Round Hall, Dublin, 4th ed., 2018) suggest that an application pursuant to Order 17, rule 4 is the appropriate procedure to adopt following the assignment of a loan or chose of action. See page 351/52 as follows (footnotes omitted).
“6-111 However, it would seem that the assignment of a loan or chose in action is an “event” within the meaning of Order 17, rule 4. This was the view of Peart J in Irish Bank Resolution Corporation v O’Driscoll , who commented that “[t]he event is clearly the purchase by it of the loan book referred to”. In Irish Bank Resolution Corporation v Lavelle , Baker J accepted the submission that the purpose and effect of Order 15, rule 14, is to fix the time at which an application to add, strike out or substitute a party may be made and said that it is not an empowering provision. She further held that Order 17, rule 4 permits an application to be made to add or substitute a party who has taken a legal assignment of a loan book from the original plaintiff. On the basis that there had been a change or transmission of the interests of the plaintiff in loan facilities, she made an order in that case pursuant to Order 17, rule 4, instead of Order 15, rule 14.
6-112 This conclusion was confirmed on appeal by the Court of Appeal in Stapleford Finance Ltd v Lavelle, which accepted the view put forward by the notice party that there was “no reason in principle why an ‘event’ within the meaning of the rule should mean an extraneous event, such as death, but not a private event, such as a contract for the sale of the loans”. The Court of Appeal also upheld the conclusion reached by Baker J in Lavelle that the assignment of the loan amounted to a change in interest within the meaning of Order 17, rule 4. Irvine J expressed the view that the legislative intent of s.12 of the Irish Bank Resolution Corporation Act 2013 would be defeated if the Rules did not permit the purchaser of the “cause of action or proceedings” to be substituted as plaintiff. She concluded that there was no valid reason why Order 17, rule 4 should be given the narrow construction put forward by the appellant and she held that Baker J had been correct in holding that she had power pursuant to that rule to substitute the respondents as the sole plaintiff in the proceedings before the court.”

28. These passages appear to me to represent an accurate statement of the law in this regard. Of course, the factual position in the present case is somewhat different. Here, there has been no change in the identity of the plaintiff, and hence no transfer of a loan or chose in action. There is no new party being joined to the proceedings. The only change is to the corporate status of the existing plaintiff, and the legal effect of this change has been addressed under the previous heading above by reference to Section 63(12) of the Companies Act 2014. As explained, I am of the view that, strictly speaking, it is unnecessary for a company to make a formal application to court to amend the title of proceedings to reflect the change in status of the company. If such an application is to be made, then I think that it should be made pursuant to the court’s inherent jurisdiction rather than pursuant to Order 17, rule 4. Having had the benefit of full argument, I do not think that such an application fits within the parameters of Order 17, rule 4 in circumstances where there is no change or transmission of interest, and no new party joined to the proceedings.
29. The order of 26 February 2018, was made on an ex parte basis. I think that this procedure was correctly adopted, and that it was open to the Plaintiff to proceed in this manner. Of course, an order which has been made on an ex parte basis is always subject to the right of an affected party to apply on notice to have the order varied or discharged. This represents an important procedural safeguard for the affected party.
OBJECTIONS TO THE EX PARTE ORDER
30. Mr. Kavanagh, in his various affidavits and at the hearing before me, has raised a series of objections to the order amending the title of the plaintiff company in the proceedings. I propose to address these in turn.

31. The first objection is that the plaintiff company had ceased to exist by virtue of the enactment of the Companies Act 2014, and that Start Mortgages DAC is a “new company”. This objection is untenable, and runs contrary to the express provisions of Section 63 of the Companies Act 2014. These provisions have already been discussed in detail at paragraph 15 et seq . above. The re-registration of an existing private company as a designated activity company does not affect any rights or obligations of the company, and the company continues in being albeit with a new status.

32. A similar argument has been rejected by the High Court in the context of the re-registration of a limited company as an unlimited company pursuant to the Companies (Amendment) Act 1983. See Kearney v. Allsop Ireland [2016] IEHC 166.

“9. Further, section 52 of the Companies (Amendment) Act, 1983, governs the re-registration of a limited company as unlimited and section 52(7) provides that ‘the re-registration of a limited company as an unlimited company pursuant to this Act shall not affect any rights or obligations of the company, or render defective any legal proceedings by or against the company, and any legal proceedings which might have been continued or commenced against it in its former status may be continued or commenced against it in its new status.’ This statutory provision reflects the intention of the Oireachtas that a valid re-registration does not create a new corporate entity and has no effect upon the rights and obligations of the company.”
33. The second objection is to the effect that the plaintiff company does not hold any charge or title in the name of Start Mortgages DAC on “any conveyance register”. See Mr. Kavanagh’s affidavit of 3 December 2018. With respect, this objection misses the point. On the facts of the present case, there has been no change in ownership. This is not a situation whereby the ownership of a loan or the underlying security has been transferred from one entity to another, such as might occur, for example, on the sale of a loan book of a financial institution.
34. The case law relied upon by Mr. Kavanagh in this regard is not relevant. In particular, the judgment of Laffoy J. in Kavanagh & Bank of Scotland plc v. McLaughlin [2015] IESC 27; [2015] 3 I.R. 555, and that of Baker J. in Harrington v. Gulland Property Finance Ltd. (No 2) [2018] IEHC 445 deal with an entirely different matter, namely the transfer of the ownership of a registered charge under the Registration of Title Act 1964 (as amended), and the requirement that the transferee must become registered as the owner of the relevant charge on the relevant folio if it wishes to exercise the statutory powers conferred by the Act.

35. The next number of objections advanced by Mr. Kavanagh raise procedural issues as to the form in which the application was made and subsequently recorded. A complaint is made that, whereas the ex parte application is said to be grounded upon an affidavit of Gill Cotter filed in the proceedings, this affidavit is not listed on the case record as posted on the Courts Service’s website, nor does the affidavit appear on the file held in the Central Office of the High Court. The explanation for this is provided in a subsequent affidavit filed on behalf of one of the solicitors acting for the plaintiff company, Ms. Barbara Tanzler sworn herein on 16 January 2019. This affidavit explains that the application made to the High Court in February 2018 took the form of an “omnibus” application, whereby the plaintiff company relied on an affidavit and ex parte docket filed in one set of proceedings ( Start Mortgages Ltd. v. Ryan Record Number 2008 No. 26 SP) to ground an application to amend a total of twelve sets of High Court proceedings. These proceedings were identified in an exhibit to the grounding affidavit of Gill Cotter sworn on 13 February 2018 filed in the Ryan proceedings.

36. In short, the plaintiff company, rather than filing twelve affidavits in almost identical form, relied instead on one affidavit to make the application in respect of the twelve different sets of proceedings. Given that the factual ingredients of the application, namely proof of the re-registration of the company, are uncontroversial, there was no need to file twelve different affidavits. The approach adopted by the plaintiff company in February 2018 was appropriate.

37. The legitimacy of employing an omnibus application of this type has been confirmed by the High Court (McDermott J.) in Irish Bank Resolution Corporation v. Kennedy [2016] IEHC 395. McDermott J. indicated that this was an appropriate way to proceed in relation to proceedings before the High Court. On the particular facts of the case, however, McDermott J. indicated that it would not be appropriate in the context of Circuit Court proceedings given the division of jurisdiction of that court over different localities. In particular, McDermott J. did not consider that the administrative benefits which arise in the context of the High Court would be available in the context of the Circuit Court.

38. Mr. Kavanagh makes a further objection to the effect that the order was amended pursuant to the slip rule. The explanation for this amendment has been set out in detail in the affidavit of Ms Tanzler sworn herein on 16 January 2019. In brief, it seems that the original version of the order, which had been drawn up on 31 March 2018, incorrectly referred to the second named defendant as Deirdre Murphy. This was amended by the Registrar on 9 April 2018 under the slip rule to reflect the correct name, Deirdre Kavanagh. The fact of this amendment is recorded in the amended order.

39. Order 28, rule 11 (as amended in 2009) reads as follows.

“11. Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected without an appeal—

(a) where the parties consent, and with the approval of the Court, by the registrar to the Court,
(i) on the application to the registrar in writing of any party, to which a letter of consent to the correction from each other party shall be attached or
(ii) on receipt by the registrar of letters of consent from each party; or

(b) where the parties do not consent, by the Court,
(i) on application made to the Court by motion on notice to the other party or
(ii) on the listing of the proceeding before the Court by the registrar on notice to each party.”

40. As appears from the terms of the order, the correction of clerical mistakes generally requires either (i) the consent of the parties and the approval of the court, or (ii) a formal application or listing before the court. These requirements do not readily translate to the correction of an order which has been made ex parte . It would seem anomalous that a party who is not entitled to notice of the substantive application would nevertheless have to be put on notice of an application to correct a clerical mistake in the order made on foot of that substantive application. On the facts of the present case, such an interpretation would have the odd result that whereas the application to amend the title of the proceedings to refer to the plaintiff company as a “designated activity company” could be made ex parte , the subsequent correction of the clerical mistake in the description of the second named defendant (Deirdre Murphy as opposed to Deirdre Kavanagh) should have been made on notice to the defendants.
41. Given the potential anomalies which could arise were Order 28, rule 11 to be interpreted as applying to ex parte applications, I tend to the view that the rule probably does not apply. However, in circumstances where the objection has been pressed by Mr. Kavanagh, I propose to consider the objection on its merits. The correction consists of the amendment of the original version of the order to refer to Deirdre Kavanagh as opposed to Deirdre Murphy. This correction ensures that the order properly reflects the actual parties to the proceedings, and the inclusion of the incorrect name was clearly a clerical error. The amendment does not affect the substance of the order, and does not prejudice any of the parties to the proceedings. Accordingly, I am satisfied that the amendment is an appropriate amendment to make, and represents no more than the correction of a clerical mistake. I will make an order confirming the amendment made to the original order of 9 April 2018.

42. A separate objection is made by Mr. Kavanagh to the effect that one of the affidavits sworn in opposition to his application to discharge the order of February 2018 is sworn by an employee of Start Mortgages Holding Ltd., not Start Mortgages DAC. Mr. Kavanagh seeks to rely on the judgment of the High Court (O’Malley J.) in Ulster Bank Ltd. v. Dermody [2014] IEHC 140. This judgment actually addresses a different issue, namely the circumstances in which reliance can be placed upon the Bankers Books Evidence Act 1879. The purpose of this legislation is to enable evidence to be given of the contents of other parties’ bank accounts without the necessity for the attendance of a representative of the bank concerned and the production of the relevant books. The affidavit evidence must be provided by a partner or officer of the bank.

43. In the present case, the only evidence being provided by Ms. Eva McCarthy is in relation to the history of the proceedings. No evidence of the type contemplated by the Bankers Books Evidence Act 1879 is involved.

44. A further objection is made that the application to amend the title of the proceedings has been made after the granting of the order of possession. Mr. Kavanagh seeks to draw an analogy with case law in relation to the setting aside or amending of final orders. With respect, this analogy is inapt. The judgments relied upon are concerned with a situation where there is an attempt made to change the substance of a final order, i.e. an order that has been drawn up by the court and where all possibility of appeal has been exhausted.

45. By contrast, the amendment in the present case is a technical amendment only, which reflects the change in corporate status of the plaintiff company. It does not affect the substance of the order in any way.

46. Finally, an objection has been made to the effect that the application should not have been made pursuant to Order 17, rule 4 of the Rules of the Superior Courts. For the reasons indicated earlier, I have taken the view that an application to amend the title of a plaintiff company—if it is to be made at all—should be made pursuant to the inherent jurisdiction of the court. Accordingly, I propose to vary the order of February 2018 to reflect the fact that it is made pursuant to the inherent jurisdiction of the court. Of course, this does not affect the outcome of the application. I am satisfied that the amendment of the title of the proceedings was appropriate and should be allowed.
CONCLUSION
47. For the reasons detailed herein, the first named defendant’s application to discharge the order of 26 February 2018 is dismissed.

48. I will, however, vary the order in the following respects. First, the words “pursuant to Order 17 Rule 4 of the Rules of the Superior Courts” will be replaced with “pursuant to the inherent jurisdiction of the court and having regard to Section 63 of the Companies Act 2014”. Secondly, the words “a change and/or transmission of interest having taken place after the commencement of the said proceedings” will be deleted. Thirdly, the words “this amendment was confirmed by the High Court (Mr Justice Simons) on 11 April 2019” are to be added after the reference to the amendment made on 9 April 2018.

 

EMI Records (Ireland) Ltd v UPC Communications Ireland Ltd

[2013] IEHC 204

 

Neutral Citation [2013] IEHC 204

THE HIGH COURT
COMMERCIAL

[2012 No. 12381 P]
[2012 No. 225 COM]

 

 

BETWEEN

EMI RECORDS (IRELAND) LIMITED,
SONY MUSIC ENTERTAINMENT (IRELAND) LIMITED, UNIVERSAL MUSIC IRELAND LIMITED AND

WARNER MUSIC IRELAND LIMITED

PLAINTIFFS
AND
UPC COMMUNICATIONS IRELAND LIMITED,

VODAFONE IRELAND,

IMAGINE TELECOMMUNICATIONS LIMITED,

DIGIWEB LIMITED,

HUTCHINSON 3G IRELAND LIMITED AND

BY ORDER TELEFONICA IRELAND LIMITED

DEFENDANTS

JUDGMENT of Mr. Justice Kelly delivered on the 3rd day of May, 2013
Introduction
1. This is my judgment on the application of a company called Digital Rights Ireland Limited to be appointed as amicus curiae to this suit.

2. The application is opposed is opposed by the plaintiffs. The defendants are neutral in respect in respect of it.
The Proceedings
3. The principal relief sought by the plaintiffs is an injunction, pursuant to s. 40(5A) of the Copyright and Related Rights Act 2000 (as amended). They seek an order requiring the defendants to block or otherwise disable access by subscribers to the website “thepiratebay.org” (the Pirate Bay) and related domain names, IP addresses and URL’s set forth in the schedule to the plenary summons.

4. The plaintiffs are all Irish registered companies. Each one is a member of an international group of companies. For example, the first is the Irish member of the EMI group and the second is the Irish member of the Sony group.

5. The majority of Irish record companies, including the plaintiffs, are members of the Irish Recorded Music Association Limited (IRMA). That entity is the representative body of the record industry. The four major groups of companies which are represented through the plaintiffs in the membership of IRMA supply approximately 78% of the pop music sound recordings to Irish consumers.

6. The defendants are the largest broadband internet service providers in the State supplying between them, together with Eircom, over 85% of all broadband in the State.

7. Each plaintiff has an exclusive licence to make available in the State, whether by way of distribution to retailers or directly to the public via the internet, copies of the sound recordings, copyright in respect of which is owned by companies in their individual international group of companies. The Pirate Bay is a large and popular website. It is used for the purpose of making available, without the rightholders’ consent, on an enormous scale, works which include the sound recordings in respect of which the plaintiffs are the exclusive licensees or the owners of the copyright. The Pirate Bay operates as a vast directory of copyright material that internet users (which include subscribers to the defendants’ internet services) are making available for downloading, copying and onward distribution by other internet users. The directory indicates what material is available and who is making it available. The scale of this infringement of copyright is enormous.

8. The plaintiffs contend that, given the volume of material which is made available via the Pirate Bay website and the number of downloads from it, it is inevitable that a significant number of subscribers to the defendants’ internet services are using the website to copy and make available recordings to other internet users.

9. In earlier proceedings before this Court, the court accepted evidence as to the huge scale of the violation of the plaintiffs’ property rights which is taking place via the Pirate Bay website.

10. The plaintiffs believe that the defendants will not in fact object to being required to block the Pirate Bay websites because of the notorious scale of the copyright infringement which is taking place there.
Previous Action
11. In earlier proceedings between EMI Records Ireland Limited & Ors v. UPC Communications Ireland Limited [2010] IEHC 377, Charleton J. delivered judgment on 11th October, 2010. Those proceedings sought injunctions against the defendant, an internet service provider, to prevent the theft of the plaintiff’s copyright material by third parties illegally downloading it over the internet. In dealing with the injunction sought in respect of the activities of the Pirate Bay, the judge said this:-

“In the second paragraph of their prayer for relief, the recording companies ask for a blocking injunction against Pirate Bay. This site is responsible for the great bulk of internet piracy in this country. Mr. Kavanagh, as I have said, described how he used it. To begin illegally downloading copyright material, all that one needs to do is to access Pirate Bay, download the appropriate software from them, search on their website what swarms are active and what tracks are being offered, and then join one of those swarms using the relevant software. Regrettably on a full consideration of this matter, a blocking injunction is not available in Irish law.
Were it available, I would grant it. Mr. Harrison, in evidence on behalf of UPC indicated, how, through Eircom, when that access was blocked, he readily found a way through. However, this took him twenty minutes. Professor Nixon offered the opinion that such blocking was futile. I do not agree. In the telecommunications industry it has been noted that where an area moves from access to other areas, such as the Aran Islands to Dublin, or the Aran Islands to New York, by dialling the operator, to direct dial, that the improvement in service causes a leap in usage. This is known as the service improvement jump. It must work in the opposite situation. I would regard it as both educative and helpful to block Pirate Bay were I enabled by the relevant legislation to do so. At the very least, it declares that the activity is illegal. I cannot grant the injunction because I have no legal power to do so.”

12. Later in the judgment, he said:-
“In failing to provide legislative provisions for blocking, diverting and interrupting internet copyright theft, Ireland is not yet fully in compliance with its obligations under European law. Instead, the only relevant power that the courts are given is to require an internet hosting service to remove copyright material. Respecting, as it does, the doctrine of separation of powers and the rule of law, the Court cannot move to grant injunctive relief to the recording companies against internet piracy even though that relief is merited on the facts.”
13. In the course of his judgment, Charleton J. also made reference to the fact that legislative intervention would be required, should the legislature see fit, to protect constitutional rights to copyright and to foster the national resource of creativity. He pointed out that the power to block access to internet sites, to disable access, to interrupt a transmission, to divert a transmission and to cut off internet access and control circumstances were clearly provided for in the law of the neighbouring kingdom and are specifically outlined in the law of other European States. They are highly developed in the United States of America. However, such powers were not available in Irish law.
14. Having identified this lacuna, the plaintiffs were obliged to commence proceedings against the State for breach of its obligation to fully implement Article 8(3) of the Copyright Directive 2001/29 (the Directive). On 29th February, 2012, the Minister for Jobs, Enterprise and Innovation, promulgated Statutory Instrument 59 of 2012 which makes express provision for the granting of injunctions against internet service providers pursuant to the provisions of Article 8(3) of the Directive.

15. The availability of relief under this statutory instrument is not dependent on the establishment of liability for copyright infringement on the part of the defendant intermediary. The plaintiffs have made it clear that they are not contending that the defendants are so liable.

16. Given the coming into force of S.I. 59 of 2012, these proceedings have now been commenced seeking the relevant injunctive relief.
The Proposed Amicus Curiae
17. This application is grounded upon an affidavit of T.J. McIntyre who is a solicitor, Associate Dean at the School of Law in University College Dublin and chairman of the applicant. He says that the applicant is “an Irish human rights body devoted to defending civil, human and legal rights in the digital age”. The applicant was founded in 2005 and is a not for profit undertaking. It is a member of the European Digital Rights Initiative and works with other civil rights groups such as the Irish Council for Civil Liberties.

18. Mr. McIntyre points out that the applicant successfully applied for and was granted locus standi in a case called Digital Rights Ireland Limited v. Minister for Communication & Ors. In that case, he says that McKechnie J. described the applicant as a sincere and serious litigant and thought that it was appropriate to grant to it an ability to advance arguments on behalf of citizens in general in the nature of an actio popularis.

19. Mr. McIntyre says that the applicant has sought to inform public debate in various ways. In October 2011, it organised a conference entitled “Innovation, Information and the Internet: Modernising Copyright Law”. It also made a joint submission with a number of members of the National Parliament and the solicitors appearing for it in these proceedings to the government’s copyright review committee.

20. Insofar as these proceedings are concerned, the applicant says that it has a strong interest in them because of the fact that this is the first time in this jurisdiction that a court will be asked to block a website following the passage of S.I. 59 of 2012. The applicant believes that such an order could have the effect of jeopardising the rights of individuals and undertakings operating in Europe and globally. This legislation may, it is said, provide a mechanism by which parties could apply to the court for reliefs which may limit the rights of others.

21. The applicant is concerned to ensure that all the issues which are before the court are fully explored and argued. This is particularly so because blocking orders will impact not merely on the parties to this action but also on parties not before the court. These would include Irish internet users and owners and operators of the sites which it is proposed to block. The applicant would seek to put before the court matters which those persons might seek to raise were they themselves directly represented. Mr. McIntyre reiterates the novel nature of this application as a result of the legislative change brought about by S.I. 59 of 2012.

22. Mr. McIntyre goes on to point out that under s. 2 of the European Convention on Human Rights Act 2003, this Court is under a duty to interpret and apply any statutory provision or rule of law insofar as is possible in a manner compatible with the State’s obligations under the European Convention on Human Rights. This, he says, is a duty which exists independently of any point raised by the parties in a matter where non-parties are affected. The applicant is therefore concerned to assist the court in addressing the requirements of the European Convention on Human Rights in the context of internet filtering.

23. He also points out that the court has not yet made any order directing the various entities and individuals who are providing the internet services which the parties to these proceedings may be directed to cease access to, to be notified of this action or to be given the legal right to appear to defend such actions.

24. Mr. McIntyre avers that the applicant can maintain what he describes as a neutral role in assisting the court in matters that might arise and may bring expertise to the case in areas that might not otherwise be available to, or be ventilated by, the parties seeking to protect their own discreet interests. He gives, by way of example, the possible need to highlight to the court where the public interest and wider European legal rights stand to be eroded if a certain form of order was to be made.

25. As already noted, the applicant is a member of European Digital Rights, an international non-profit association formed under Belgian law. As such, Mr. McIntyre believes the applicant can assist the court by highlighting issues which have arisen in other jurisdictions where orders such as those sought by the plaintiffs were the subject of litigation.

26. He goes on to say that the applicant is well placed to assist the court in assessing the public interest and exercising its discretion in respect of the reliefs sought. He calls attention to Article 1(3)(a) of Directive 2009/140/EC of the European Parliament and of the Council amending Directives 2002/21/BC on a common regulatory framework for electronic communications networks and services and 2002/19/EC and 2002/20/EC.

27. Finally, he points out that the applicant’s costs incidental to its intervention as an amicus curiae will be borne entirely by itself.
The Opposition
28. Initially there did not appear to be any serious opposition to the joinder of the applicant on the part of the plaintiffs. However, having regard to factual matter which is set forth in an affidavit of Helen Sheehy, Solicitor, they now believe that it would not be appropriate for the applicant to play the role of amicus curiae in these proceedings.

29. In her affidavit, she points out that the applicant has indicated that it can maintain a neutral role in assisting the court and is also of the view that it can represent, in effect, what it believes to the be the public interest in the matter.

30. She avers that when she was first contacted in respect of the proposed application that she wrote to the applicants’ solicitors seeking three pieces of information. She sought the identity of its officers, its members and from whence its funding came.

31. In response to this request Ms. Sheehy was informed that the applicant had three officers. They were named as Antoin O Lachtnain, an entrepreneur, Colm Mac Cárthaigh, an engineer with Amazon.com and T.J. McIntyre, the applicants’ chairman. It is a company limited by guarantee and there were eight subscribers to the company but their identity was not disclosed. The letter of reply made it clear that the applicant did not seek any particular outcome of the issues between the parties but rather sought to be of assistance to the court. The response did not indicate the source of the applicants’ funding. That query was renewed and in addition Ms. Sheehy asked if there was a reason why this query was not answered. No response was received to that letter. Neither was the matter addressed in Mr. McIntyre’s affidavit grounding this application. At the hearing, counsel dealt with this question by way of submission.

32. Ms. Sheehy asserts that having regard to certain material which she exhibited in her affidavit that the applicant is not capable of exercising a neutral role in the proceedings.

33. She exhibited material from an internet site forming part of a campaign called “Stop SOPA”. This was a campaign to seek to dissuade the relevant minister from enacting S.I. 59 of 2012. She highlights that the “Stop SOPA” internet site contains a number of statements which the plaintiffs describe as “quite extreme and completely inaccurate”. These include assertions that the relevant statutory instrument would represent “a radical new law” and that “your civil rights and free access to the internet are under threat”. It is also alleged that the statutory instrument which was then under consideration was a “similar proposal” to the “stop online piracy act” in the United States. The plaintiffs take the view that the statutory instrument in question gives effect to clear EU legislation which had (as was pointed out by Charleton J. in the EMI case) been incorrectly transposed in this jurisdiction. It is said that there is no comparison between the United States legislation and the relevant statutory instrument. Neither is the statement contained on the website that the statutory instrument “means judges can order ISPs to block access to sites like YouTube, Facebook and Twitter where an individual user from anywhere in the world is sharing infringing material” accurate. A contribution on the website from one “S. McGarr” describes the decision to introduce the statutory instrument as:-

“A very bad decision because it will not solve the legal problem of uncertainty which the government say they want to address with this law. They have introduced a law which is likely to be successfully challenged and in the meantime will create nothing but further uncertainty”.
Mr. McGarr continues:-
“It is a bad decision because the law is being enacted without a vote of the Oireachtas. This law will potentially impact on the freedoms to do business and to free expression of every company and citizen in the country. The need for primary legislation has never been clearer.”
He continues:-
“It is a bad decision because it ignores the unanimous concerns of Irish internet experts. From the Irish Internet Service Providers’ Association (whose members include Google), to Blacknight Hosting, to ALTO, all have said that the Statutory Instrument is not appropriate. Only yesterday Google spoke out against Internet censorship.”
He also describes the Minister’s decision to enact the statutory instrument as a “disgraceful decision”.
34. The website describes the Stop SOPA Ireland Campaign as a “public interest campaign from McGarr Solicitors”. The website goes on to state “If you are a member of the media looking for background, quotes or commentary, the following campaigners offer a mix of anti-SOPA viewpoints”. Amongst the persons listed are Simon McGarr of McGarr Solicitors who are the solicitors acting for the applicant on this application and T.J. McIntyre, its’ chairman.

35. Ms. Sheehy also avers that the plaintiffs reviewed the personal website of Mr. McIntyre, (www.tjmcintyre.com). It contains postings by him concerning S.I. 59 of 2012. None of them are supportive of the statutory instrument. In a contribution of 25th January, 2012, Mr. McIntyre invites those who are worried by the then proposed statutory instrument to support the “Stop SOPA” campaign.

36. Mr. McIntyre also publishes on his website details of how to circumvent blocking orders made by the United Kingdom Courts.

37. Arnold J. in his judgment in the case of Twentieth Century Fox & Ors v. B.T. [2011] EWHC 1981 (Ch) said that he was of the view that whilst there were measures by which a block could be circumvented that it was neither necessary nor appropriate for him to describe those measures in his judgment. In addition, Ofcom in the United Kingdom, in its report on internet blocking decided that it was appropriate to redact the sections dealing with the technical means by which circumvention can be achieved. However, Mr. McIntyre published the entire redacted section on his website which effectively provides a guide on how to circumvent blocking orders of the United Kingdom Courts.

38. Ms. Sheehy also calls attention to a comment which is contained on the website of the solicitors acting for the applicant, Messrs McGarr. The institution of these proceedings was noted on that website in a posting of 7th December, 2012. The website states that “the commencement of these proceedings will come to (sic) no surprise to anyone who followed the Stop SOPA Ireland campaign at the beginning of this year”. On the same entry it is stated:-

“On the last day of February this year, the Government gave them [the plaintiffs] their ideal law.
We may be seeing, on the 17th December of this year, the first of the predicted applications to block Ireland’s users from accessing particular websites.

If so- and the applicants are successful- it is difficult to imagine that it will be the last.”

39. Whilst the plaintiffs acknowledge the entitlement of the applicant and its solicitors to hold their opinions and to express them they cannot accept that the applicant can maintain a neutral role in assisting the court given what I have outlined. Neither can they see how it would be possible for the applicant to assist the court in making an assessment of the public interest in an impartial manner.
40. The plaintiffs also point out that Mr. McIntyre in his affidavit made no reference at all to the rights of creators, composers, artists, performers, publishers or producers.

41. Ms. Sheehy also deals with that part of Mr. McIntyre’s affidavit where he indicated that the applicant would seek leave to put before the court matters which Irish internet users and the owners and operators of sites which it is proposed to block would raise, if they themselves were directly represented. She points out, however, that there is no dispute raised by any defendant in the proceedings as to the fact that the Pirate Bay website is unlawfully distributing copyright material and that those who use that website to make that material available to download it are infringing copyright.

42. Finally she points out that insofar as there are human right issues as identified by Mr. McIntyre, these have already been the subject matter of consideration by the court in judgments in EMI & Ors v. UPC of 10th October, 2012 and EMI & Ors v. Eircom of 27th June, 2012. She also says that it has been made clear by correspondence received on behalf of some of the defendants that a substantial number of issues going to such matters as freedom of expression and the right to do business will be brought to the attention of the court by the parties to the litigation. As for Directive 2009/140, that has also been considered by the court in EMI v. Eircom of 27th June, 2012.

43. It is in these circumstances that the plaintiffs take the view that the applicant, far from being neutral, is a highly partisan entity unsuited to the role of amicus curiae. Furthermore, they contend that the parties before the court have already intimated that they will be addressing the issues which the applicant seeks to raise and thus its participation will be of no assistance to the court. Any argument that the blocking of access to the Pirate Bay website would in some way amount to an infringement of the rights of the operators of that website or of internet subscribers has been the subject of consideration by courts in this jurisdiction and elsewhere and has not met with judicial approval. Ms. Sheehy also believes that the joinder of the applicant would add to the duration of the proceedings with the incurring of additional costs.
Jurisdiction
44. There is no dispute but that there is an inherent jurisdiction in the court to appoint an amicus curiae. This question was addressed by Keane C.J. in H.I. v. Minister for Justice, Equality and Law Reform [2004] 1 ILRM 27, where he said:-

“While there are no statutory provisions or rules of court providing for the appointment of an amicus curiae, save in the case of the Human Rights Commission, the court is satisfied that it does have an inherent jurisdiction to appoint an amicus curiae where it appears that this might be of assistance in determining an issue before the court. It is an unavoidable disadvantage of the adversarial system of litigation in common law jurisdictions that the courts are, almost invariably, confined in their consideration of the case to the submissions and other materials, such as relevant authorities, which the parties elect to place before the court. Since the resources of the court itself in this context are necessarily limited, there may be cases in which it would be advantageous to have the written and oral submissions of a party with a bona fide interest in the issue before the court which cannot be characterised as a meddlesome busy body. As the experience in other common law jurisdictions demonstrates, such an intervention is particularly appropriate at the national appellate level in cases with a public law dimension.
It is, at the same time, a jurisdiction which should be sparingly exercised. Clearly, the assistance to be given to an appellate court will be confined to legal arguments and supporting materials. It is not necessary to consider the circumstances in which it would be appropriate for the High Court to appoint an amicus curiae. It is sufficient to say that, as was pointed out in United States Tobacco Company v. Minister for Consumer Affairs (1988) 83 A.L.R. 79, the position of an amicus curiae is quite different from that of an intervener. It was said in that case that an amicus curiae, unlike an intervener, has no right of appeal and is not normally entitled to adduce any evidence.

In the present case, an issue of public law arises and the judgment of the court may affect parties other than those now before the court. The court was satisfied that the UNHCR might be in a position to assist the court by making written and oral submissions on the question of law certified by the High Court and, accordingly, appointed it to act as amicus curiae and, for that purpose, to make oral and written submissions.”

Applicable Principles
45. Having accepted that there is a jurisdiction to make an order of the type sought, I now turn to a consideration of the case law which sets forth principles which the court ought to apply in deciding whether or not to do so.
46. The first of the cases is O’Brien v. Personal Injuries Assessment Board (No. 1) [2005] 3 I.R. 328. That was a case in which the applicant brought judicial review proceedings arising, in part, from the refusal by the respondent Board to deal with the applicant’s solicitor in respect of an application made by him to that Board. The Law Society of Ireland asked to be joined as amicus curiae on the basis that the case raised important issues of principle that were of concern to the solicitor’s profession as a whole. Finnegan P., having referred to the decision in H.I., from which I have just quoted, identified a number of relevant considerations.

47. The first was whether the applicant “has a bona fide interest and is not just acting as a meddlesome busy body”.

48. Second, Finnegan P. identified that O’Brien’s case had “a public law dimension” and that the Law Society “has not just a sectional interest, that is the interest of its members, but a general interest which should be respected and to which regard should be had.”

49. It is clear from the passage which I cited from Keane C.J. in the H.I. case that that judge did not consider the circumstances in which it would be appropriate to appoint an amicus curiae to a court of trial. That issue fell to be dealt with by Finnegan P. who reviewed a number of relevant English decisions which had led to amici curiae being appointed in trial courts. Finnegan P. decided to join the Law Society in circumstances where his decisions would affect the rights of a considerable number of litigants and the solicitor’s profession as a whole.

50. The issue arose again in the case of Doherty v. South Dublin County Council [2007] 1 IR 246. There, the Equality Authority asked to be joined as amicus curiae in proceedings taken by members of the travelling community against the respondent County Council and others. The State respondents objected to the application on the basis that the Equality Authority did not have statutory authority to act as amicus curiae. The High Court overruled those objections and its decision was affirmed by a majority in the Supreme Court. That court held that the Equality Authority did have statutory power to act in such a role. Macken J., however, dissented. While she was in a minority, the comments which she made on the principles to be applied on the joinder of an amicus curiae are of relevance. That was also the view of Clarke J. who specifically so observed in Fitzpatrick v. F.K. [2007] 2 IR 406. Indeed, he summarised the observations of Macken J. in this regard as follows (at 415):-

“it seems clear that amongst the important factors to be taken into account are:-
(a) whether the proposed amicus curiae might be reasonably said to be partisan or, on the other hand, to be largely neutral and in a position to bring to bear expertise in respect of an area which might not otherwise be available to the court; and

(b) the stage which had been reached in the proceedings with particular reference to a distinction between trial courts and appellate courts.”

Clarke J. went on:-
“In addition, it seems to me that a factor of particular importance should be the extent to which it may be reasonable to assume that the addition of the party concerned as an amicus curiae might be said to bring to bear on the legal debate before the courts on an issue of significant public importance, a perspective which might not otherwise be placed before the court. In similar vein it seems to me appropriate for the court to consider whether there is a risk that an issue of significant public importance might be debated in circumstances where there may not be an equality of arms.”
51. Clarke J. then developed the two factors which he distilled from the judgment of Macken J. As to the first, he said as follows:-
“The first of the two criteria identified by Macken J. in Doherty v. South Dublin County Council [2006] IESC 57, [2007] 1 IR 246 concerns the distinction between a partisan and a neutral amicus curiae . As is noted in her judgment, the courts in other common law jurisdictions, which have developed principles in respect of the criteria to be applied in allowing parties to be joined as amicus curiae , have, to an extent, moved away from the principle that such parties should be entirely neutral and have permitted, in certain circumstances, parties to be appointed who could be expected to adopt a partisan role in the proceedings. However that is not to say that the role likely to be played is not, nonetheless, an important factor to be taken into account. It was pointed out by counsel for the plaintiffs and, in particular, counsel for the second defendant, that the bodies who have been appointed in this jurisdiction have been public bodies charged either under statute or otherwise with a public role. The role of the Equality Authority speaks for itself. Similarly the United Nations High Commissioner for Refugees is charged with international public obligations under the United Nations treaties. The reason why Finnegan P. was persuaded to join the Law Society in O’Brien v. Personal Injuries Assessment Board (No. 1) [2005] 3 I.R. 328 stemmed from the public role of the Law Society under its legislation as regulator of the solicitors’ profession.
I am not persuaded that the joining of an amicus curiae is confined to such bodies. However it seems to me that the fact that the body seeking to be joined is charged in either domestic or international law with a public role in the area which is the subject of the litigation concerned is a factor of some significance to be taken into account.”

52. It is to be noted that the entity which sought to be joined in Fitzpatrick’s case was the Watch Tower Bible and Tract Society of Ireland, the body which represents Jehovah’s Witnesses in Ireland. The Society wished to be heard in the case which was taken by the Coombe Hospital authorities in respect of a patient who was a Jehovah’s Witness and declined blood transfusion treatment following a postpartum haemorrhage.
53. As to the second criterion identified by Macken J. which concerned the stage that the proceedings had reached at the time when the application to join was made, he said this:-

“It seems clear from the authorities that an amicus curiae will more readily be joined at the stage of a final appellate court. The reasons for this are obvious. Proceedings at trial are likely to involve significant issues concerning the facts of the individual case. Even where a case may be said to be a ‘test case’, where it may be likely that general principles will be defined, nonetheless the jurisprudence of the courts in this jurisdiction makes it clear that issues of constitutional importance are only likely to be decided when it is necessary on the facts to decide them. The extent to which it may become necessary to decide issues of principle in any particular case will depend on the facts of that case. Questions of the standing of a claimant or, indeed, the possibility of the application of a ‘reverse standing’ test as identified will inevitably focus on the facts of an individual case.
It is obvious, therefore, that an amicus should not be permitted to involve itself in the specific facts of an individual case. It is only after those facts have been determined that the extent to which issues of general importance may remain for decision will be clear. That is far more likely to be the case at the appellate rather than the trial level. It is not clear at this stage the extent to which there may be a dispute as to the facts of this case which might be material to any of the considerations of the court. It is certainly true to say that there appears to be a complaint made on behalf of the first defendant, and supported by the society, as to the precise way in which the issues in her case were dealt with by the plaintiffs on the day in question. It certainly could not be said that this case is a ‘pure test case’ in which it is highly unlikely that any issues concerning the facts of the individual case would be relevant. While I am not persuaded that there is an absolute bar to parties being joined as amicus curiae at trial level, I believe that the circumstances in which it would be appropriate so to do should, ordinarily, be confined to cases where there is no significant likelihood that the facts of an individual case are likely to be controversial or to have a significant effect on determining what issues of general importance may require to be determined.”

54. I return for a moment to the views expressed by Macken J. in Doherty’s case. She said:-
“In those jurisdictions where an amicus curiae is more common, the amicus remains at all times a ‘friend of the court’. Of significance, I believe, is the long established jurisprudence, well considered also in academic writings, that a clear distinction is drawn between an amicus curiae at appellate level and at trial court level. This distinction is of utmost importance…. even though the role of amicus curiae over the years has become more partisan than was originally the case, that partisan role may be accepted at the final appellate level but not at trial court level.”
55. Finally, as is clear from both the judgments of Macken J. and Clarke J., a further consideration which the court must bear in mind is whether the joinder of the party as an amicus is likely to bring to bear on a case involving an issue of significant public importance, a perspective or resources that might not otherwise be available.
Objection In Limine
56. The plaintiffs say that the court has not been made aware of what is the nature or interest of the applicant. It has declined to disclose who are the subscribers to its memorandum of association. It has declined to identify its funder or funders. In such circumstances, it is said that the court cannot entertain an application for the appointment of a person or entity as a friend of the court if there is an unwillingness to disclose who in truth is sought to be appointed to that role.

57. Whilst it is correct to say that the source of the applicant’s funding was not disclosed either in correspondence prior to this application being brought or in the affidavit of Mr. McIntyre, during the hearing, it’s counsel, by way of submission rather than evidence, disclosed that it is derived from modest donations from members of the public.

58. Second, it is said that this applicant has no public law role. It is a very different entity to those who have been made amici curiae in this jurisdiction in the past. It is argued that it comes nowhere close even to the unsuccessful applicant in the Fitzpatrick case where that applicant claimed to be representative of the adherents to a particular religious faith.

59. It is argued that I ought to decide this application by reference to these two issues alone and to dismiss the application in limine.

60. I do not propose to adopt that course. I am not convinced that those two issues of themselves must necessarily mean that this application should fail at the threshold.

61. Nonetheless, these matters may be taken into account in the exercise of my discretion. I attach little if any weight to the former, but the latter is of some significance.
Findings
62. The applicant cannot be equated with bodies which to date have been joined as amici. It is not charged in either domestic or international law with a public role in the area which is the subject of this litigation.

63. A reading of the affidavit grounding this application would suggest that the applicant is a neutral body wishing to assist the court from that standpoint of neutrality. But the investigations carried out on behalf of the plaintiffs and deposed to in the affidavit of Ms. Sheehy have cast an altogether different light on the position. It is clear that the applicant’s solicitors have been conducting what they call a “public interest campaign” with one of them identified as a press contact on the “Stop SOPA” campaign. Their website made their views clear that the Minister ought not to sign into law S.I. 59 of 2012. When he had done so, the decision was described as a disgraceful one.

64. Mr. McIntyre addressed members of the public on his website and asked for support for the campaign being conducted under the Stop SOPA banner. I think it is particularly significant and somewhat disturbing that his website contained a redacted section of the UK Ofcom report showing a way of circumventing blocking orders made by the United Kingdom Courts.

65. It is difficult in these circumstances to see how the applicant could be regarded as a neutral party. I am unable to do so.

66. I also take into account the injunction of Keane C.J. that this jurisdiction should be “sparingly exercised” and the limited circumstances in which an amicus may be appointed in a court of trial as distinct from an appellate court. I do not believe that the applicant here has demonstrated circumstances which would warrant its appointment at trial court level.

67. Neither do I believe that the participation of the applicant would provide to the court a perspective on matters of principle or public importance which would not otherwise be available to it. A good deal of attention was given to this factor by the applicant in arguing in favour of its joinder to this litigation. It did so by reference to the suggestion that the effect of an injunction or blocking order would impact not merely on the parties to the suit but also on those not before the court. That contention has to be seen in the light of the factual position which has emerged to date.

68. In that regard, there is no dispute but that the operators of Pirate Bay are involved in copyright infringement. Proceedings against them in other jurisdictions as well as this provide ample evidence of that. Second, there has never been any dispute but that Irish internet users who avail themselves of Pirate Bay are also involved in copyright infringement.

69. If it is the intention of the applicant to contest either of the factual matters dealt with in the preceding paragraph, then it will be seeking to involve itself in the factual aspects of the proceedings and there is no role for an amicus curiae in that regard.

70. Insofar as reliance is placed upon the fact that this is a test case in relation to what is described as a “novel statutory power”, I am of opinion that that argument is not made out. It is undoubtedly true that this is the first time that a court in this jurisdiction is being asked to make orders authorised by S.I. 59 of 2012. But that statutory instrument does no more than give effect to Article 8.3 of the Copyright Directive of 2001 in respect of which there is now a body of case law both in the European Court of Justice, the United Kingdom Courts and to a limited extent, the Irish courts.

71. Insofar as the court may be required to conduct a balancing exercise or to direct a person be notified of the substantive application, I am of opinion that it can do so well within the parameters of the litigation as constituted at present. I am satisfied that the court will, at trial, have full submissions made to it on the relevant legal authorities. If dissatisfied with the material put before it, the court can seek from the present parties any additional assistance which it may need. I do not believe that the relevant Directives require the appointment of an amicus curiae. Even if they did, I do not believe that the current applicant would be an appropriate entity to fulfil that role.

72. This application is refused.

JUDGMENT of Mr. Justice Hogan delivered the 24th September 2013.
1. This is an application, pursuant to O.16, r. 8(3) RSC, to set aside an order of this Court joining Brendan G. Cashell as a third party to these proceedings. That order was made in this Court (Cross J.) on the 23rd July, 2012. This third party notice claiming indemnity and contribution was served on 9th August 2012 by the first named defendant, BHK Credit Union Ltd. (“BHK”). Mr. Cashell, who is an architect, maintains that the third party notice was not served “as soon as reasonably possible” in the manner required by s. 27(1)(b) of the Civil Liability Act 1961 (“the 1961 Act”). It is also contended that the notice did not comply with the requirement of O. 16, r. 1(3) in that the application for leave to issue the notice was not made within twenty eight days from the date limited for the delivery of the defence. The issue arises in the following way.

2. In the second part of 2005 BHK sought to proceed with plans to demolish and to re-develop its existing premises at Blackrock, Co. Louth and it retained the second defendant, John Clarke & Son (Ardee) Ltd. (“John Clarke”) as the main contractor for this purpose. The plaintiffs in this action are a married couple who are the owners of a public house immediately adjacent to BHK’s premises. Mr. Cashell was the nominated architect for the project.

3. According to their statement of claim filed on 30th July 2010, the plaintiffs contend that in March 2006 their public house premises was damaged in the course of the demolition and refurbishment work on the BHK property. The plaintiffs further contend their premises has deteriorated gradually as a result of these building works, with new cracking visible and any existing cracks deteriorating further. It is further pleaded that the premises will have to close for six weeks to enable repair extensive repair works to be carried out. It is perhaps appropriate to record that the plaintiffs have taken no part in the hearing of this application regarding the set aside of the third party notice.

4. Any judgment on the merits of these claims (or, for that matter, the defence of the various defendants and prospective third parties) will naturally have to await the outcome of the main proceedings, but is sufficient for present purposes to refer to these claims since they form the backdrop to the present application. Before proceeding to consider the substance of the set aside application, it is, however, first necessary to fill in further details regarding the rather complex chronology of the proceedings.
The defence of BHK
5. The proceedings were commenced on 10th June 2010 and the proceedings were served on 11th October 2010. An appearance was entered by BHK on 1st November 2010. While there is a dispute as to when exactly the statement of claim was served on BHK, it is accepted that the service of the statement of claim on this particular defendant was certainly no later than 12th November 2010. At that point BHK then served a detailed notice for particulars (running to some 28 paragraphs) shortly thereafter. These requests were not immediately replied to and a motion was then issued on 23rd February 2011. The motion was made returnable for the 9th May 2011 and the replies were furnished on the 5th May 2011.

6. While BHK filed a defence on 5th July 2011, it seems evident that their legal advisers must have been at least contemplating prior to that point whether Mr.Cashell should be joined as a third party. On the 20th May 2011 BHK’s solicitors requested that Mr. Cashell supply them with a copy of his files. Mr. Cashell replied on 30th May 2011 confirming receipt of the request. He indicated that he had a vast volume of paperwork and that while he was prepared to hand over the relevant documentation, he sought assurances regarding the time-frame for doing so and the costs which were thereby involved.

7. BHK also separately sought voluntary discovery from John Clarke a few weeks later on 26th July 2011. With this request for discovery, BHK sought material relating, inter alia, to Mr.Cashell’s involvement in the building project, including the instructions which he had given in relation to the demolition and building works. In the absence of agreement, BHK then sought an order for discovery, which order was subsequently made on 21st November 2011.
The defence of John Clarke
8. Although John Clarke delivered a defence on 11th November 2011 a copy of this was only supplied to BHK’s solicitors by the plaintiff’s solicitors on 4th April 2012. The terms of that defence appear to have come as a surprise to BHK, because John Clarke pleaded that it had no role in the design, planning or structural assessments which were involved in the demolition and construction of the site. John Clarke thus contended that if the plaintiffs had suffered any loss by reason of the interference with the right of support enjoyed by their building, this was the responsibility of BHK and its professional advisers.

9. It was at that juncture that a decision was made by BHK to seek to have Mr. Cashell joined to the proceedings. The appropriate motion was issued on the 18th May 2012 and it was made returnable for the 23rd July 2012. On that day the order was duly made by this Court (Cross J.) and the third party notice was then served on Mr.Cashell on the 9th August 2012. It is against this background that two questions immediately arise.

10. First, is it relevant that the third party notice was not served within the twenty-eight day period specified by O. 16, r. 1(3)? Second, irrespective of the answer to the first question, was the third party notice served “as soon as reasonably possible” within the meaning of s. 27(1)(b) of the Civil Liability Act 1961? We can now proceed to consider each of these questions in turn.
The failure to comply with the requirements of O. 16, r. 1(3)
11. Order 16, r. 1(3) of the Rules of the Superior Courts 1986 provides:

“An application for leave to issue the third-party notice shall, unless otherwise ordered by the Court, be made within twenty-eight days from the time limited for delivering the defence or, where the application is made by the defendant to a counter-claim, the reply.”
12. It is accepted that the application for leave to issue the notice was considerably out of time for the purposes of O. 16, r. 1(3). Even if one further accepts that the statement of claim was served on BHK on 12th November 2010, it follows that the application to serve the third party notice ought to have been made by December 10th, 2010, at least so far as the requirements of the sub-rule is concerned.
13. While it must also be accepted that the order of Cross J. dated July 23rd, 2012 does not in terms purport to extend time for the purposes of r. 1(3), the judge must nonetheless be taken to have implicitly sanctioned an extension of time – if only on an ex parte basis – for this purpose: see Golden Vale plc v. Food Industries plc [1996] 2 I.R. 221, 227 per McCracken J. and Robbins v. Coleman [2010] 2 IR 180, 197, per McMahon J.

14. Counsel for Mr. Cashell, Mr.McGinn, has nonetheless argued forcefully that the subsequent delay on the part of BHK in applying for the third party notice ought to be measured from this date (i.e., December 2010) for the purposes of both O. 16, r. 1(3) and, for that matter, the time allowed by s. 27(1)(b) of the 1961 Act. It is not, I think, contended, that the third party notice ought to be set aside merely for want of compliance with the time limit since this would, absent manifest prejudice to the potential third party, represent what Laffoy J. described in S. Doyle and Sons (Roscommon) Ltd. v. Flemco Supermarket Ltd. [2009] IEHC 581 as a “draconian step.”

15. But the argument advanced on behalf of Mr.Cashell also raises a broader issue of principle which, rather surprisingly, does not seem to have been heretofore directly addressed in the extensive jurisprudence on this point. The novel issue is this: could the drafters of r. 1(3) implicitly cut down the discretion of this Court to determine what period of time was “reasonably possible” for the purposes of s. 27(1)(b) by prescribing a 28 day time period of this kind when no time period of this kind was actually specified by the Oireachtas itself when enacting that very sub-section?

16. In my view, this question must be answered in the negative. It may first be recalled that the Rules of Court are simply statutory instruments which have been made and promulgated by the Superior Court Rules Committee (with the consent of the Minister for Justice and Defence) under the provisions of s. 36 of the Courts of Justice Act 1924 in order to regulate aspects of court procedure. As I had occasion to point out in Gokul v. Aer Lingus plc [2013] IEHC 432, these Rules do not, of course, have the same normative status in our legal system as legislation enacted by the Oireachtas. Specifically, given that Article 15.2.1 of the Constitution vests the exclusive law-making function in the Oireachtas, it is axiomatic that the Superior Court Rules Committee could not have been given the power to amend the law (whether directly or indirectly) by the making of a statutory instrument of this kind: see, e.g., Cooke v. Walsh [1984] I.R. 710, 728-720, per O’Higgins C.J. Nor could the Superior Court Rules Committee themselves have expanded (or, for that matter, limited) the meaning to be ascribed to a particular statutory provision by the making of Rules of Court of this kind, since the terms of any such procedural regulation prescribed by statutory instrument must be ignored “in determining the scope of the [parent] Act”: see Frescati Estates Ltd. v. Walker [1975] I.R. 177, 187 per Henchy J.

17. Second, it is striking that the Oireachtas itself did not see fit to prescribe a time limit for the purposes of s. 27(1)(b). There is accordingly here an implicit legislative recognition that, given the almost infinite variety of circumstances in which the necessity for a third party notice might arise, the question of what amounted to “as soon as is reasonably possible” for the purposes of s. 27(1)(b) had to be determined in the overall circumstances of any given particular case and not by reference to some ex ante formula.

18. It follows, therefore, that the Rules Committee could not in any way seek to abridge or otherwise trammel the appropriate exercise of discretion by the Court under s. 27(1)(b) of the 1961 Act by rules of court since this would have amounted to the indirect amendment of the law. This would be plainly contrary to Article 15.2.1. While the reference to 28 days in O. 16, r. 1(3) is, therefore, as Laffoy J. hinted in S. Doyle, at the very most an indicative starting point in any assessment of what was reasonably possible in the circumstances, it cannot take from the task of the Court to arrive at an independent determination of whether the requirements of s. 27(1)(b) have been complied with in any particular case. It follows, therefore, that BHK’s admitted non-compliance with the requirements of O. 16, r. 1(3) at least so far as the 28 day requirement is concerned is not – and could not validly be – dispositive of the separate question of whether the requirements of s. 27(1)(b) have been complied with.
The interpretation of s. 27(1)(b) of the Civil Liability Act 1961
19. Before immediately turning to the more important question of whether the requirements of s. 27(1)(b) have been complied with by BHK, it is necessary first to re-visit some of the contemporary case-law on the meaning of this sub-section. This sub-section provides:

“A concurrent wrongdoer who is sued for damages or for contribution and who wishes to make a claim for contribution under this Part-(2)(b) shall, if the said person is not already a party to the action, serve a third party notice upon such person as soon is reasonably possible and, having served such notice, he shall not be entitled to claim contribution except under the third party procedure. If such third party notice is not served as aforesaid, the court may in its discretion refuse to make an order for contribution against the person from whom the contribution is claimed.”
20. One of the objects of the procedural reforms effected by the 1961 Act was to avoid a multiplicity of actions arising out of the same dispute, so that where possible all issues involving plaintiffs, defendants and third parties are heard either together or in a sequenced trial: see, e.g., Governor of St. Laurence’s Hospital v. Staunton [1990] 2 I.R. 31, Connolly v. Casey [2003] 1 I.R. 345 and Robins v. Coleman [2009] IEHC 486, [2010] 2 IR 180. The language of s. 27(1)(b) must be understood against that background.
21. It is perhaps precisely for this very reason that the concept of what is “as soon is reasonably possible” within the meaning of s. 27(1)(b) is a relative one and depends on the circumstances of the case: see, e.g., Connolly v. Casey [2000] 1 IR 345, Mulloy v. Dublin Corporation [2001] 4 IR 52 and Robins v. Coleman. As we have already observed, the Oireachtas did not seek to fix a set time period, but rather imported a concept of relative urgency which is designed to compel the defendant to seek to issue a third party notice with all deliberate speed having regard to all the relevant circumstances.

22. As Murphy J. explained in Mulloy ([2001] 4 IR 52 at 56-57):

“The statute is not concerned with physical possibilities but legal and perhaps commercial judgments. Proceedings cannot and should not be instituted or contributions sought against any party without assembling and examining the relevant evidence and obtaining appropriate advice thereon. It is in that context that the word “possible” must be understood. Furthermore, the qualification of the word “possible” by the word “reasonable” gives a further measure of flexibility. As Barron J. pointed out in McElwaine v. Hughes (Unreported, High Court, Barron J., 30th April, 1997) at p. 6 of the unreported judgment:- ‘Clearly the words ‘as soon as reasonably possible’ denotes that there should be as little delay as possible, nevertheless, the use of the word ‘reasonable’ indicates that circumstances may exist which justify some delay in the bringing of the proceedings.’”
23. As I put the matter in EBS Building Society v. Leahy [2010] IEHC 456:
“…..the question thus becomes whether, having regard to all the circumstances, it was reasonable for a defendant to wait for the period in question before applying to join the third party, although any such permissible delay will generally be measured in weeks and months and not years.”
24. This principle is illustrated by the facts of Mulloy where the third party notice was issued some thirteen months after the defence had been filed and where the Supreme Court held that it was “possible for the second defendant, on the information available to it, to make a prudent and responsible decision several months before the application was brought”: [2001] 4 IR 52, 59 per Murphy J.
25. Another example of a similar approach is to be found in Connolly v. Casey, a case involving an action for professional negligence. Here the plaintiff sued her former solicitors for negligence regarding advice given in respect of the institution of proceedings against a health board. The proceedings were commenced in February 1995 and a statement of claim was served in the following month. A year passed and a notice for particulars was served in April 1996. A defence was finally delivered in April 1996 and the particulars replied to on 14th January 1997. The affidavit to join the third party was sown in April 1997 and the grounding motion seeking liberty to issue and serve the third party notice was issued in July 1997. The order granting such liberty was made ex parte by this Court on 20th October 1997. The third party in question was a barrister had who been retained by the defendant solicitors to give advice in relation to the earlier set of proceedings.

26. On the third party’s application to have the notice set aside, this Court (Kelly J.) held that the defendant solicitors had waited unduly, but the Supreme Court disagreed. In her judgment Denham J. noted that the defendant solicitors had pondered the question of whether the counsel who had given advices should be joined in the action and that two reasons had been given for this delay. One reason was the necessity to obtain a statement from the instructing solicitor setting out the basis on which it was alleged that counsel was negligent. The other reason is perhaps one which is particularly germane to the present case, namely, whether it was reasonable to await the delivery of particulars.

27. Kelly J. had rejected this latter argument, noting that on the facts the replies to particulars added little to the defendant’s state of knowledge regarding the involvement of counsel, but Denham J. disagreed, saying that this was the “wrong test”. She added ([2000] 1 IR 345, 350):

“The test is whether it was reasonable to await the replies to particulars. Whether the replies did or did not materially alter the state of knowledge is not the test. The queries raised in the notice for particulars were relevant to the claim against the third party and thus it was reasonable to await the replies.”
28. A similar approach was also taken by me in Leahy. In that a case a firm of solicitors had given certificates of title to a building society in respect of three parcels of land as security for various loans. It was later alleged that one of these parcels of land were owned by A rather than B, as had been previously thought. In addition, in separate High Court proceedings the building society obtained orders for possession in respect of the two other parcels of land.
29. The building society later commenced separate proceedings claiming damages for professional negligence against the solicitors in February 2009. A defence was filed by the solicitors in June 2009, but a notice for particulars was then filed at the same time. The notices to particulars were replied to in September 2009. A motion to join A and B as third parties then issued in November 2009. I rejected the argument advanced by the third parties that the defendants had delayed unduly in seeking to join them:

“…it may be noted that whereas the solicitors filed their defence in the present proceedings in June 2009, it seems clear from the affidavit of Seamus Tunney of 9th April, 2010, that it was still necessary for their purposes to ascertain a number of vital matters arising from the statement of claim. Thus, they needed to know exactly what had transpired in the earlier High Court proceedings. In addition, they also needed to know the basis on which the EBS calculated its loss and damage. It should be recalled that the property contained in Folio 3949 was just one of the three items of property offered as collateral. If, for example, the other two properties repossessed by the EBS pursuant to the order of McGovern J. were sufficient to meet the debt, then the EBS would have suffered no loss (or, at least, no appreciable loss) in respect of any defects to the title to Folio 3949. These were matters which the solicitors were fully entitled to explore with the EBS prior to making any decision with regard to the involvement with third parties. As we have seen, a notice for particulars was served on 22nd June, 2009, and the replies to those particulars were dated 3rd September, 2009. As a result, the solicitors learnt that the proceedings with regard to Folio 3949 had been adjourned generally with liberty to re-enter and that the loss claimed by the EBS with regard to those lands was €350,000. The advice of counsel was then sought and it culminated in a decision to seek to join the [A and B] as third parties. Following a short hiatus during which some further issues were raised with counsel, the appropriate motion accordingly issued on 23rd November, 2009. For my part, having regard to the circumstances of this case, I cannot agree with the submission that the solicitors did not comply with the requirements of section 27(1)(b). Given that the solicitors were themselves being sued for professional negligence, they were entitled to reflect on the potential ramifications of the joinder of the third parties, especially once the extent of the claim made by the EBS had been clarified in September, 2009 with the replies to notice for particulars. Recalling again the words of Murphy J. in Mulloy, s. 27(1)(b) is concerned with an important decision which a litigant must make with regard to the potential involvement of a third party and the length of the delay must be measured against that context and not by reference to purely physical possibilities.
While the solicitors could, of course, have immediately issued the motion within days of the replies to the notice for particulars – and, arguably, even earlier again – that it not what s. 27(1)(b) actually contemplates should happen and still less does it require it. Instead, what is required that a defendant proceed with all deliberate speed prior to making any decision with regard to the issue of a third party notice. While we have already noted that any tolerable delay will usually be measured in weeks and months, in general the delay inherent in all reasonable steps taken by a prudent and responsible litigant will be not be considered excessive for the purposes of section 27(1)(b), absent perhaps specific and identifiable prejudice to the third party which has been occasioned as a result of this delay. This, in my judgment, is what occurred in the present case. The solicitors acted with all deliberate speed in the matter and it is for these reasons that I dismissed this application to have the third party notice set aside.”

30. Two further considerations relevant to the present application may also be mentioned at this point. The first is the fact that the authorities are in complete agreement that third party notices which (as here) seek contribution and indemnity on the basis of allegations of professional negligence fall into a special category. This point was not only stressed by Denham J. in Coleman and by Laffoy J. in S. Doyle, but in Robbins McMahon J. added ([2010] 2 IR 180, 188) that “an element of caution is required before a third party notice is served especially where an allegation of professional negligence is involved.”
31. The other consideration is that allowance must be made for the fact that the litigation is complex and that it involves a multiplicity of parties. This may mean that a “more indulgent interpretation” should be given to the meaning of the words “ as soon as is reasonably possible” than might otherwise have been the case: see Robbins v. Coleman [2010] 2 IR 180, 197, per McMahon J.
Application of these principles to the facts of the present case
32. It is against this background that the question of compliance with the requirements of s. 27(1)(b) falls to be measured. The first item of delay relates to the period from November 2010 (when the statement of claim was served) to early May 2011 (when the BHK’s notice for particulars was replied to). In my view, this period of delay was not unreasonable given that as earlier authorities such as Connolly make clear, a defendant in this position is normally at least entitled to clarify the scope of the case against him by means of raising a notice for particulars and to await the replies before finally deciding on a strategy.

33. The second period of delay is the period from May 2011 to July 2012. It is true that BHK took a further two months following the delivery of replies to particulars to file a defence, but this cannot be adjudged to be unreasonable in itself. The real complication – and reason for the ensuing further delay – arises from the fact that a copy of John Clarke’s defence was made available to BHK only in April 2012, even though it had been previously furnished to the plaintiffs almost six months previously in November 2011.

34. It must be regarded as unfortunate that BHK were not furnished with a copy of that particular defence at the same time as it was supplied to the plaintiffs, but BHK can hardly be faulted for this. As we have already noted, the terms of that defence must have caused BHK some surprise, since – probably for the first time – another defendant was now unequivocally pointing the finger of blame in the direction of BHK and its professional advisers. While, as we have also already observed, the option of joining Mr.Cashell as a third party must have been under consideration for some time, the terms of John Clarke’s defence now served to concentrate BHK’s mind, as – looking at the matter from its perspective – there was now no realistic option then open other than to apply to have a key professional adviser joined as a third party.

35. The appropriate motion was then issued without any appreciable further delay on the 18th May 2012. As we have seen, the order joining the third party was duly made by Cross J. on 23rd July 2012 and service was then effected on Mr.Cashell on 9th August 2012.

36. While the delays were unfortunate and the lapse of time between November 2010 and August 2012 was not inconsiderable, there were nonetheless significant mitigating factors to excuse and justify the delay. Given that the third party notice involved a claim of professional negligence, it was necessary for BHK to act with caution. It was certainly entitled to await the replies to its notice to particulars and then to file its defence. It was equally entitled to respond to developments in the litigation, such as when it became clear from the tenor of John Clarke’s defence that that defendant denied any responsibility for the design, planning or structural assessments involved in the construction work. In this respect the present case is not altogether unlike Robbins – itself another construction case where the plaintiff occupier contended that structural damage was done to his property and which involved a multiplicity of defendants – where McMahon J. held ([2010] 2 IR 180, 193) that one of the defendants was entitled to await an amended statement of claim before “considering any action against third parties.”

37. While it is true that s. 27(1)(b) provides – in the graphic phrase used by Kelly J. in SFL Engineering Ltd. v. Smyth Cladding Systems Ltd., High Court, 9th May 1997 – for a “temporal imperative”, yet as Peart J. put it in Tuohy v. North Tipperary County Council [2008] IEHC 11, “that imperative in the present case must be seen as applying from the time when the defendant was first in a position to know that the claim against the proposed third party was possible to pursue.” I would qualify those words slightly so far as the present case is concerned, because while it was always possible for BHK to have pursued a third party claim as against Mr.Cashell at some earlier stage, the practical reasons and potential justifications for taking this step only really came into focus once BHK had been supplied with a copy of the John Clarke defence. In this case, at least, it was from that particular point in April 2012 that the temporal imperative came into play.

38. Having regard, therefore, to all of these considerations, it cannot be said that BHK did not act as soon as was reasonably possible for the purposes of s. 27(1)(b).
The position of Mr. Cashell
39. It is next necessary to consider the position of Mr.Cashell. In the affidavit sworn to ground the motion seeking to have the third party notice set aside, his solicitor has averred that his client’s defence of the proceedings would be compromised by the intervening delay of some seven years since the building was first constructed and that the memory of Mr.Cashell “and of any other potential witness will be compromised by such delay.”

40. It should first be said that the authorities are not, perhaps, in precise agreement on the question of prejudice in this general context. Certainly, if the party seeking to join the third party does not comply with the requirements of s. 27(1)(b), the balance of authorities suggests that the third party notice should nonetheless be set aside irrespective of whether possible prejudice on the part of that third party can be established: see, e.g., Murnaghan v. Markland Holdings Ltd. [2007] IEHC 255, per Laffoy J. and Greene v. Triangle Developments Ltd. [2008] IEHC 52, per Clarke J. Given, however, that I have already found that BHK did in fact comply with the requirements of s. 27(1)(b), this issue does not now strictly arise.

41. The issue which I now have to consider is rather the inverse of that proposition: should the court strike out a third party notice where the delay prejudicially affects the capacity of the third party to defend the proceedings, even though the temporal requirements of s. 27(1)(b) were otherwise satisfied? Here again I suggest that, at least at the level of general principle, the answer to this question is most obviously in the affirmative. The obligation placed on the judicial branch by Article 34.1 of the Constitution to administer justice presupposes that the courts will ensure that justice is administered in a fair, efficient and timely fashion: see, e.g., Doyle v. Gibney [2011] IEHC 10. It follows, accordingly, from a straightforward application of East Donegal principles (East Donegal Co-operative Ltd. v. Attorney General [1970] I.R. 317) that the courts would not exercise this discretionary jurisdiction to join a third party where it was plain that a third party’s constitutional right to a fair hearing or to a hearing within a reasonable time would otherwise be jeopardised, even if the party seeking to effect the joinder had itself complied with the requirements of s. 27(1)(b).

42. Nevertheless, while this may represent the general principle, I am not convinced that it arises for application in the present case. It is true that it has been contended on behalf of Mr.Cashell that his memory and that of other potential witnesses will have dimmed over the years, although no specific particulars have been given of this rather generalised complaint. Nor has it been suggested that the intervening delay of some seven years has been necessarily advantageous to the proper administration of justice.

43. Yet all of this must be put in some perspective. The biggest delay has been caused by the fact that the proceedings were only commenced by the plaintiffs some four years after the event and, of course, BHK can bear no responsibility for this. It must also be recalled that it is accepted that the third party strands possessed of a great deal of documentation in relation to the project and this will doubtless assist him and other potential witnesses to refresh their memories in relation to decisions regarding the design, planning and structural assessments which were made in the course of the demolition and construction. One might also observe that it must have been evident from the letter of request for documents in relation to the project sent on May 20th, 2011 to Mr.Cashell by BHK’s solicitors that his role might yet come under scrutiny. In truth, therefore, the subsequent service of the third party notice in August 2012 can scarcely have come as a surprise.

44. In these circumstances I find myself yielding to the conclusion that the delays here were not in themselves egregious. Nor can it be said that on these facts that the delays were also inherently prejudicial to the ability of the third party to defend himself on the merits. In these circumstances I will refuse to set aside the third party notice on the grounds of prejudicial delay affecting the constitutional rights of Mr. Cashell.
Conclusions
45. In conclusion, therefore, I would summarise my principal findings as follows:

46. First, given that the Superior Court Rules Committee could not validly abridge or trammel the duty of this Court to determine whether the requirements of s. 27(1)(b) have been complied with in any given case, it follows that the reference to 28 days in O. 16, r. 1(3) is at the very most an indicative starting point in any assessment of what was reasonably possible in the circumstances. Accordingly, BHK’s admitted non-compliance with the requirements of O. 16, r. 1(3) at least so far as the 28 day requirement is concerned is not – and could not validly be – dispositive of the separate question of whether the requirements of s. 27(1)(b) have been complied with.

47. Second, BHK were entitled to await the clarification of the scope of the case made against it by means of raising a notice for particulars and to await replies before finally deciding on a strategy. The real complication – and the ensuing further delay – arises from the fact that a copy of John Clarke’s defence was only made available to BHK in April 2012, even though it had been previously furnished to the plaintiffs almost six months previously in November 2011. It must be regarded as unfortunate that BHK were not furnished with a copy of that particular defence at the same time as it was supplied to the plaintiffs, but BHK can hardly be faulted for this. The terms of that defence must have caused BHK some surprise, since – probably for the first time – another defendant was now unequivocally pointing the finger of blame in the direction of BHK and its professional advisers. While the option of joining Mr.Cashell as a third party must have been under consideration for some time, the terms of John Clarke’s defence now served to concentrate BHK’s mind, as there was now no realistic option then open other than to apply to have a key professional adviser joined as a third party. The appropriate motion was then issued without any appreciable further delay.

48. While the delays were unfortunate and the lapse of time between November 2010 and August 2012 was not inconsiderable, there were nonetheless significant mitigating factors to excuse and justify the delay. Given that the third party notice involved a claim of professional negligence, it was necessary for BHK to act with caution. It was certainly entitled to await the replies to its notice to particulars and then to file its defence. It was equally entitled to respond to developments in the litigation, such as when it became clear from the tenor of John Clarke’s defence that that defendant denied any responsibility for the design, planning or structural assessments involved in the construction work. For these reasons, I consider that the requirements of s. 27(1)(b) have been complied with in the present case.

49. Third, it cannot be said that these delays have appreciably compromised the ability of the third party to defend himself on the merits.

50. In these circumstances I will also refuse to set aside the third party notice on the grounds of prejudicial delay affecting the constitutional rights of Mr. Cashell.

 

 

Reddy and Others v. Dublin Corporation

[1941] IR 255

 

GAVAN DUFFY J. :
I am unable to see that I have any jurisdiction, in view of Or. XVI, r. 1, of the Rules of the Supreme Court (Ir.), 1905, to try this case.
I gather that the parties do not wish to have any partial trial of the issues raised in the pleadings, although it may be that I could find one series of transactions to come within the rule.
I have, therefore, no alternative but to strike out the action.

The plaintiffs appealed to the Supreme Court (2) on the ground that Gavan Duffy J. was wrong in law in holding that the several parties joined as plaintiffs were not properly joined, and could not be properly joined, as plaintiffs in one action under the provisions of Or. XVI of the Rules of the Supreme Court (Ir.), 1905, and the provisions of the High Court Rules of 1926.
O’SULLIVAN C.J. :
17 Dec.

I agree with the judgments about to be delivered by Mr. Justice Meredith and by Mr. Justice O’Byrne.

MURNAGHAN J. :
I also agree with the judgments of Mr. Justice Meredith and Mr. Justice O’Byrne.

MEREDITH J. :
The facts of this case are fully set out in the judgment about to be read by Mr. Justice O’Byrne so it is unnecessary for me to traverse the same ground.
The position of each plaintiff is fundamentally determined by his own particular contract, and that contract is what determines the nature and identity of the transaction between him and his employer. The contracts are very various, and, assuming that the mere existence of a single common factor would, despite differentiating features, be sufficient to constitute sameness if it raised the same material question between all the parties, there does not appear to be any one such common factor.
If this action were proceeded with, judgment in the action could not, even as regards a single issue of law or fact, be given in general terms, but each particular case would have to be dealt with separately. That is the test of the application of the rule at all and before any question of the discretion of the Court arises. Any judgment in this action could only be a mere fasciculus of separate judgments externally united.
For these reasons I am of opinion that the plaintiffs cannot be joined in this action, and accordingly that the appeal must be dismissed.

GEOGHEGAN J. :
I agree with the judgments of Mr. Justice Meredith and Mr. Justice O’Byrne.

O’BYRNE J. :
The plaintiffs in this action are 13 persons employed by the defendants, and, by their statement of claim, having set out particulars as to their duties and conditions of employment, they allege that they are “workers” doing”industrial work” in an “industrial undertaking” within the meaning of the Conditions of Employment Act, 1936, and they claim that they are entitled to the benefits of the said Act. In particular and in addition to other relief, they claim:
1. A declaration that the defendants are a “local authority” or “public body” who exercise or perform”statutory powers or duties” and who supply “public service” within the definition contained in s. 2 of the said Act, and
2. A declaration that each of the plaintiffs was, and is, employed by the defendants as a “worker” in an “industrial undertaking” doing “industrial work” within the meaning of, and subject to, the provisions of the said Act, and who was, and is, entitled to the benefits of the provisions of the said Act.
In their defence, the defendants, subject to certain specified matters, substantially admit the plaintiffs’ allegations as to the nature of their respective duties. They admit that one of the plaintiffs, namely, Edward Fennell, is an “industrial worker,” but deny that he has been deprived of any of the benefits of the Act, and, subject thereto, they deny that any of the plaintiffs was, at any material time, “a worker,” employed by the defendants in an “industrial undertaking” doing “industrial work”within the meaning of the said Act, and they further deny that they, the defendants, failed or neglected to apply the provisions of the Act to any of the plaintiffs.
The action came on for trial before Mr. Justice Gavan Duffy on the 27th day of June, 1940, and the learned Judge dismissed the action, being of opinion that the action does not disclose any right alleged to exist in the plaintiffs, whether jointly, severally, or in the alternative, to relief in respect of, or arising out of, the same transactions or series of transactions.
The case turns upon Or. XVI, r. 1, of the Rules of the Supreme Court (Ir.), 1905, which provides:[Reads the rule printed ante p. 256.]
There was no suggestion by the defendants that the joinder of the plaintiffs would embarrass or delay the trial of the action. On the contrary, the defendants intimated that they were most anxious that the rights of the parties should be determined in the action as constituted. Accordingly the only question which arises for consideration is the question as to whether the rights claimed by the plaintiffs arise out of the same transactions or series of transactions, so that, if the plaintiffs brought separate actions, any common questions of law or fact would arise.
It was conceded by both parties and seems obvious that, if the plaintiffs brought separate actions, common questions of law (e.g., the meaning and effect of the said Act) and of fact (e.g., the nature of the undertaking carried on by the defendants) would arise, and, accordingly, the question for consideration may be further restricted to the one point, namely, do the rights claimed by the plaintiffs arise out of the same transactions or series of transactions.
A reference to the statement of claim will disclose the very diverse duties of the respective plaintiffs. Some of them are lamp-lighters; one a night stableman; some are caretakers in different places and with different duties; one a lodging-house attendant; one a labourer and one a night-watchman.
It is difficult to see how their respective rights can be said to arise out of the same transactions or series of transactions. Each of them is separately employed, with his own special duties and terms of employment, depending upon his individual contract. It seems to me that in each case the rights of the particular plaintiff must be determined by reference to the work on which he is engaged, and this depends upon his own employment and is peculiar to him. It is true that, in each case, the position and activities of the defendants must be considered; but, once it is conceded that in order to obtain the benefits of the Act, a plaintiff must be employed as “a worker” doing “industrial work” in an “industrial undertaking” it will be seen that the activities of the defendants will be investigated, not generally, but principally with reference to the work in which the particular plaintiff is employed. That some of the activities of the defendants amount to the carrying on of an industrial undertaking can hardly be questioned, and seems to be admitted by the defence in the case of the plaintiff, Edward Fennell.
When asked by the Court to state what were the transactions or series of transactions out of which the plaintiffs rights were alleged to arise, counsel alleged that the series of transactions, upon which they relied as bringing the case within the said rule, was the failure of the defendants to give to the plaintiffs the benefits of the said Act. In my opinion the rights cannot be said to arise out of a failure to recognise and give effect to the rights. In order to found the right it is necessary to go back and to show that the plaintiffs were entitled to the rights. This seems to me to depend in each particular case upon different facts and independent considerations.
For these reasons I am of opinion that the learned trial Judge was right in holding that the rights claimed by the plaintiffs did not arise but of the same transactions or series of transactions, and that this appeal should be dismissed.

Arnaud D. Gaultier v The Registrar of Companies

(Respondent/Respondent) and The Revenue Commissioners, The Minister for Finance, Loire Valley Limited (Notice Parties)
In the Matter of Loire Valley Limited and The Companies Acts 1963-2009; Arnaud D. Gaultier and Loire Valley Limited v Allied Irish Banks Public Limited Company
Appeal No.: 353/2012, 449/2012, 450/2012

Supreme Court

12 December 2019

unreported
[2019] IESC 89
O’Donnell J.

December 12, 2019

JUDGMENT
1. These three appeals, which can be dealt with together since they are closely related, concern orders or applications made in a short period in 2012. The first appeal concerns an application made before Murphy J. on the 5th of July, 2012. The second relates to an application made before Laffoy J. on the 31st of July, 2012, and the third, and last, appeal concerns a short hearing in a vacation sitting before de Valera J. on the 9th of August, 2012. Each was an ex parte application in the High Court, and, accordingly, there was no appearance by, or on behalf of, the respective respondents or notice parties, either in the High Court or in this court.

2. Although these three appeals relate to a period of less than a month in July and August 2012, the background appears to be matters which occurred much earlier, although capable of being discerned only imperfectly from the limited papers before the court. Mr. Gaultier contends that he was the sole member of a single-member company, Loire Valley Limited, which may have had a claim against the Revenue Commissioners in respect of the business of the importation of wine in relation to events that occurred in 2006. It appears that there had been negotiation between the parties, resulting in the Revenue Commissioners making a substantial offer with a view to settlement which was, however, not accepted. The situation became, however, much more complicated, because it also appears that any claim would be that of the company, and Loire Valley Limited had been struck off the Registrar of Companies for failure to make annual returns with effect from the 6th of April, 2012.

3. There is a clear and reasonably simple procedure for seeking to restore a company to the Register, and this most commonly occurs when it is necessary to restore a struck-off company for the purposes of proceedings. Under s. 12B of the Companies (Amendment) Act 1982 (“the 1982 Act”), as amended by s. 46 of the Companies (Amendment) (No. 2) Act 1999, (now s. 738 of the Companies Act 2014), where a court application is necessary, an application is made to the High Court (and now, in certain circumstances, to the Circuit Court). The procedure is set out comprehensively in the leading texts: Hutchinson, Keane on Company Law (5th ed., Bloomsbury Professional, 2016), pp. 498 to 501; Courtney, The Law of Companies (4th ed., Bloomsbury Professional, 2016), pp. 2019 to 2043; Conroy, The Companies Act 2014: Annotated and Consolidated (Round Hall, 2018), pp. 972 to 983.

4. The procedure normally involves notice to interested parties: the Minister for Public Expenditure, the Revenue Commissioners and the Registrar of Companies, and it may, in an individual case, require advertisement and/or other notification to creditors. Where the reason for striking-off is the non-filing of statutory accounts, the application normally involves the preparation of annual returns and an undertaking to lodge such returns. However, it appears that this course was not taken by Mr. Gaultier, and in many ways these three appeals and other proceedings reflect his differing attempts to circumvent the requirement of proceeding in accordance with the relatively simple statutory procedure.

5. Prior to any of the applications giving rise to the three appeals before this court, it appears, from the documentation submitted, that an application had been made by Mr. Gaultier to the High Court and heard by Laffoy J. on the 18th of June, 2012. It appears that Mr. Gaultier sought leave of the court to issue proceedings on behalf of the company Loire Valley Limited which at that point stood dissolved. Since the company had no legal existence at that time, and since in any event there is a general rule, to which it will be necessary to refer in greater detail later in the judgment, that a company cannot represent itself, or be represented by a shareholder or director, or other interested party, it appears that the Central Office refused to accept the proceedings and Laffoy J., correctly, it would appear, refused to grant leave to bring the proceedings. There was a clear statutory procedure which would permit the restoration of the struck-off company, and thereafter it ought to have been possible to prosecute any claim. Instead of taking that step, Mr. Gaultier sought to recast his proceedings in a fashion which might avoid the difficulty posed by both the dissolution of the company and the question of the representation of the company.

The first proceedings: Gaultier v. Registrar of Companies, Revenue Commissioners and the Minister for Finance and Loire Valley Ltd., Supreme Court Appeal No.: 353/2012
6. Again, some of the background must be gleaned from the papers, but it appears that on the 5th of July, 2012, Mr. Gaultier made an application in his own name for leave to seek judicial review directed to the Registrar of Companies and seeking, it appears, to require the Registrar to restore Loire Valley Limited to the Register.

7. According to the report prepared by the High Court judge of the subsequent proceedings, the judge (Murphy J.) pointed out that there was a proper procedure for reinstating the company, but Mr. Gaultier “insisted, without specifying dates, that he did not have the time to do so as the day of the application was the last day in which he could apply for a review of the refusal by the Registrar of Companies”. On that basis, the court, taking into consideration that the applicant was French, with a good knowledge of English but with a limited appreciation of the procedure, granted the leave sought, which simply meant that the applicant had liberty to bring proceedings in the nature of judicial review.

8. The matter then appeared in the Judicial Review List heard by a registrar of the High Court who, on the 10th of July, 2012, adjourned the motion for directions to the 2nd of October of the same year for mention. It appears, from correspondence between Mr. Gaultier and the registrar, that Mr. Gaultier was anxious to seek an injunction seeking to compel the restoration of the company to the Register on an interim basis.

9. It might be observed at this point, however, that while the judicial review proceedings themselves were unusual and faced formidable difficulties, an application for an interim or interlocutory injunction pending the hearing of any such review requiring the restoration of the company to the Register would have been extraordinary. However, the court registrar, acting as a deputy master, gave liberty to issue a notice of motion grounded in an affidavit seeking injunctive relief in the usual way. It was anticipated that the motion would be served on the other parties, who could then attend for the hearing.

10. What occurred next is somewhat confused, but it appears that Mr. Gaultier appeared in court on the 19th of July before Murphy J. to make an application. He had a notice of motion dated the 18th of July, 2012, with a blank for the return date for the date in July. The body of the motion sought:-

“the following interim injunctive reliefs: (a) voiding the dissolution of the Third Notice Party; (b) restoring the name of the third Notice Party on the Register of Companies and (c) additional just reliefs.” (Emphasis in original).

The affidavit, which was sworn on the 17th of July, referred to a conversation with counsel for the respondents on the 10th of July (this being, it appears, the date on which the matter appeared before the deputy master) and recording that it was “outlined that the word “injunctive” slipped out of the section “corrective reliefs” of the statement of ground. The word “injunctive” should apply to the said reliefs J & K”. Paragraph 5 of the affidavit recorded that “[ t ]he Court agreed on amending the statement of ground/applying for the said injunctive relief by issuing a Notice of Motion and new Grounding Affidavit”.

11. This, it should be said, although a little hard to follow, appears to correspond reasonably closely with the account given in the correspondence from the deputy master provided to the court by Mr. Gaultier. The affidavit then conti nued:-

“I beg this honourable Court to grant the following interim injunctive reliefs based on the said grounds:

J-(i) an order of mandamus voiding the dissolution of «the Company»,
(ii) as the dissolution being the result of misfeasance and malfeasance by the Respondent;
(iii) or pursuant to section 310 of the Companies Act 1963-2009;
K(i) an order of mandamus restoring the name of «the Company» on the register of companies;
(ii) as the strike-off being the result of misfeasance and malfeasance by the Respondent;
(iii) or pursuant to section 12B(3) of the CAA 1982.” ( Emphasis in original ).
Paragraph 7 of the affidavit then stated: “I beg this honourable Court to construe the above paragraph as part of the statement of grounds dated 5th Inst .”.

12. It is now apparent, from what is advanced to the court by Mr. Gaultier, that there may have been a misunderstanding in the court on the 19th of July. It appears that Mr. Gaultier may have misunderstood that the order that was made on the 10th of July permitted him to issue a notice of motion seeking an interim or interlocutory injunction. He now says that on the 19th of July he was only seeking to amend his statement of grounds which, however, was not a necessary step. On the face of the affidavit, however, and the terms of paragraph 6 quoted above, it would be understandable if the court considered that an application was being made for an interim ex parte injunction pending the hearing of the judicial review.

13. The court has a report from the High Court judge dated the 3rd of August, 2012, and Mr. Gaultier has also obtained a transcript of the DAR for that day and, moreover, has prepared his own transcript having heard the audio recording. Mr. Gaultier informed the court that he had been told he had been provided with the audio recording in error, and was highly critical of the suggestion that the audio recording was somehow being withheld from him. In fact, it is unusual for the audio recording to be provided, as it is normally easier to work from a transcript and there is no need to consult the audio record unless there is a dispute or difficulty about the transcript.

14. In this case, Mr. Gaultier fairly acknowledges that he has a strong French accent, and that the transcriber, accordingly, may have missed some of the exchanges. He produced his own transcript and contended that there were some things in it not present in the official transcript of the DAR, being firstly the introductory remark that he had an application “for leave” and that the closing remarks of the judge were “the Court doesn’t want to entertain your correspondence or affidavits at this stage” (although, on my reading, this is to be found in the DAR transcript).

15. It does not appear there is a significant or material distinction between the two transcripts, but in the hope of avoiding further misunderstanding and confusion, I am prepared, for these purposes, to use the transcript prepared by Mr. Gaultier, without suggesting that that is a desirable or appropriate course to follow in most cases. It appears likely that the exchange was recorded without notifying the court or seeking permission. If so, then, quite apart from the undesirability, and indeed illegality, of such a course, it suggests a high degree of suspicion on Mr. Gaultier’s part.

16. When Mr. Gaultier introduced the application, the judge intervened and referred to the fact that Mr. Gaultier had been before the court on the 5th of July, 2012, and had not disclosed to the court that Laffoy J. had previously refused leave issue a plenary summons. Mr Gaultier responded:- “Yes, exactly”. He was asked to explain what had happened between the 18th of June and the application on the 5th of July, and he responded that he had totally redrafted the documents. The first application was in a plenary summons format, with three grounding affidavits which were very hard to read and the applicants were two applicants: himself (Mr. Gaultier); and a limited company. The judge intervened to observe that the company was dissolved, and enquired if that was correct. Mr. Gaultier agreed. The judge then observed that Mr. Gaultier should have disclosed the fact that he had been refused leave to issue a plenary application. There followed a long exchange, and Mr. Gaultier then said that he had mentioned on the 5th of July that he had come before Laffoy J. but his application was so confusing that he did not bring that order (of the 18th of June).

17. Mr. Gaultier is very critical of this exchange. He says it must mean that either the two judges spoke about the case, or the registrars involved had spoken and alerted Murphy J. Either way, he says that this was a fundamental breach of the obligation to administer justice in public under Article 34.1 of the Constitution. This contention is, however, misconceived. There is no reason why judges should not correspond or communicate about the management of cases appearing in court. The obligation that justice shall, save in those cases provided for by law, be administered in public requires that where decisions and orders are made, they should be made after a public hearing and on the basis of the evidence and arguments submitted on that occasion. That is what occurred here.

18. It was put to Mr. Gaultier that he had not disclosed the fact of the prior application to Laffoy J. He addressed the matter and, in the event, the court did not make any decision against him in that respect. His application did not fail on that basis. All of this occurred in public and was in compliance with, rather than in breach of, the obligation to administer justice in public under Article 34.1.

19. Mr. Gaultier then suggested that the registrar, acting as deputy master, had accepted that he should be allowed to incorporate the new interim injunctive relief, which had been forgotten from the statement of grounds by a mistake for which he was responsible. This appears, however, to be a source of some, at least, of the confusion in this case. Mr. Gaultier had been permitted to issue a notice of motion seeking injunctive relief. However, he seems to have understood that to have required an amendment of the statement of grounds.

20. After further exchanges in which it is clear that the judge was struggling to understand what Mr. Gaultier was seeking, the judge asked:- “I’m still unsure, other than you want injunctive relief, the matter is in for the 2nd of October, did you tell the Court?” Mr Gaultier replied:- “Yes”. The judge enquired as to why the matter could not be left until the 2nd of October. Mr. Gaultier replied that he needed the status of the company to be reinstated as normal. Again, the judge responded:- “No. That will be dealt with on the 2nd of October.” Mr. Gaultier then asked:- “Can I have that in the interim an injunctive relief between that?”. Later, he said he sought the relief against the Registrar of Companies. Later again, he said:- “Yes, for the interim injunction.”

21. It is apparent that the judge understood, reasonably, it must be said, that this was an application for an interim injunction compelling the restoration of the company to the register. The judge observed that that was a matter for the hearing, but nevertheless enquired as to what prejudice Mr. Gaultier would suffer. Mr. Gaultier suggested that there was a statute of limitations involved. The judge observed that this had already been the basis upon which he had been persuaded to grant leave to seek judicial review. Mr. Gaultier said there were two statutes: the three-month period (presumably that provided under the Rules of the Superior Courts for judicial review), and another statute of six years which related to the dealings of the Revenue Commissioners, which he said had prevented his company from trading for the last six years.

22. At the risk of reading between the lines, and further confusion, it now appears, in the light of everything that has been said, that what Mr. Gaultier had in mind was an interim injunction restoring the company to the Register so as to permit proceedings to be commenced against, perhaps, the Revenue Commissioners although, in fairness, there was no evidence explaining why the statute of limitations in respect of any such claim was due to expire or, indeed, why proceedings had not been commenced at any earlier point when, moreover, the company had not been dissolved.

23. Furthermore, and understandably, the judge was approaching the case on the basis that the claim was against the Registrar of Companies when it now appears that was only an intermediate step, intended to permit a claim or claims to be brought against other parties. It now seems clear that the whole application was driven by a desire to avoid the statutory procedure for restoring the company to the Register.

24. The judge observed that Mr. Gaultier was appearing without notice to anyone or to the Registrar of Companies, and asked whether a letter been written to the Registrar asking them to stay their hand and not to do anything until the motion was heard on the 2nd of October. Mr. Gaultier said he had not done that and the judge then concluded:-

“Why don’t you do that? Why are you coming to court to do something you can do by letter? You have got the order of the Court granted. That’s returnable for the 2nd of October. The Court will not allow any further application to be made in relation to this matter. Judicial review is judicial review. It’s what you chose, not what the court suggests that you should’ve done. But the Court is not going to allow you to do anything further but suggests that you might write to the Registrar of Companies pointing out — you presumably have done this before and the Court doesn’t want to entertain your correspondence or affidavits at this stage.”

It is apparent from the transcript, and the report of the judge on the hearing, that the judge considered that he was being asked to grant an interim injunction to provide the relief being sought on the judicial review itself, that is the restoration of the company to the Register, something which would itself be extraordinary to grant at a substantive hearing. It is, accordingly, not surprising that, insomuch as the application was being made for an interim injunction, it was refused.

25. Subsequently, Mr. Gaultier entered into correspondence with the registrar who had acted as deputy master. Mr. Gaultier, in an e-mail of the 20th of July, 2012, explained that he believed that his notice of motion would be heard before the end of term, and continued:-

“However, this did not happen and a kind of confusion has been created. I would be very much obliged if you could precise if I was wrong in thinking that this notice of motion could be heard before the end of this term, or it is just to be an amendment to be heard on the 2nd of October.”

The registrar who had acted as deputy master responded that the motion for directions in the judicial review had been adjourned to the 2nd of October, 2012. Liberty had been given to issue a notice of motion grounded on an affidavit seeking injunctive relief, which would mean that the Central Office would assign the earliest available hearing date. That motion would be served on all the other parties. She then continued:-

“Despite the direction given, I note from our computer system that you made an application ex parte to Mr. Justice Murphy yesterday for injunctive relief pending the hearing of the judicial review. This application was refused. In the event you are unhappy with that decision you should appeal that order to the Supreme Court.”

26. It is now clear that there was confusion here, but a large part of it was due to Mr. Gaultier’s desire to avoid the obvious route for the restoration of the company to the Register, and his own misunderstanding of the procedures involved. Insomuch as he was seeking an interim injunction before Murphy J. on the 18th of July – and at times it appears from his transcript that he was – then Murphy J. was entirely correct to refuse any such application. Insomuch as Mr. Gaultier now suggests that all he was seeking was leave to amend his statement of grounds to seek an interim injunction, then that relief was entirely unnecessary since he had already been granted leave to bring an application for such an injunction in advance of the hearing in October.

27. Furthermore, and in any event, this matter is now plainly moot, since the only purpose of such an application would have been to grant an injunction pending the hearing of the substantive judicial review. That hearing proceeded, and Mr. Gaultier has informed the court that the High Court, perhaps unsurprisingly, refused the substantive reliefs sought.

28. Quite apart from the matters already addressed, it is therefore apparent that the question which Mr. Gaultier now maintains was being agitated in court on the 18th of July, namely an application to amend the statement of grounds to include an injunction application, is both academic and moot. In all the circumstances, the appeal on this matter must be dismissed.

The second set of proceedings: In the matter of Arnaud D. Gaultier and the Companies Acts 1963-2009, Supreme Court Appeal No.: 449/2012
29. It does not appear that Mr. Gaultier ever issued the notice of motion seeking an injunction which he had been permitted to issue by order of the registrar who had acted as deputy master on the 10th of July. Instead, Mr. Gaultier’s response to the events of the 18th of July and the subsequent correspondence with the registrar who had acted as deputy master was to recast the matter once more, and to bring an application before Laffoy J. a few days later on the 31st of July, 2012.

30. It was an ex parte application, but Mr. Gaultier had prepared a motion paper recording that he was “an Entrepreneur, Sole Trader, Consultant in Innovation (MSc. Innovation & Strategic Information) and Sole Member of Loire Valley Limited” ( Emphasis in original ). The relief he sought was that the court would vest in him the powers under subs. 231(1) of the Companies Acts 1963 – 2009 (“the 1963 Act”), including the power ““ with the sanction of the court or of the Committee of inspection to bring or defend any action or other legal proceedings in the name and on behalf of the” Loire Valley Limited ” ( Emphasis in original) .

31. The grounding affidavit observed that s. 231 commonly applies to a liquidator in a winding-up by the court, which Mr. Gaultier contended was “in other words an individual enjoying the powers of both General and Extraordinary meetings of a Company” ( Emphasis in original ). He then contended that, as a sole member of Loire Valley Limited, he enjoyed the powers of both general and extraordinary meetings and, by analogy, therefore should be entitled to be vested with the powers under subs. 231(1) of the 1963 Act. At paragraph 10 of the affidavit, he observed that nothing in the application was prevented by the decision of the Supreme Court of the 21st of December, 1965, in Battle v. Irish Art Promotion Centre Limited [1968] I.R. 252 (“Battle”), where the applicant was the managing director and major shareholder of the defendant company.

32. Laffoy J. refused the relief. In a careful and comprehensive report prepared for the Supreme Court appeal, Laffoy J. explained that she was aware from the previous application that the company had been struck off the Register, and had been dissolved with effect from 6th of April, 2012. She also recorded that, on that occasion, she had explained to the applicant that he could only issue proceedings in his own name, not in the name of the company, and referred him to the decision in Battle. She also explained to the applicant that “there is no shortcut for restoring a company to the Register of Companies. There is a procedure for applications to restore a company to the Register and, as a precondition to making a restoration order, outstanding returns have to be filed”.

33. She refused the application on the basis that the jurisdiction conferred by s. 231 only applied where the company was being wound up by the court and there was an official liquidator in place, and she considered that it would be an abuse of the process to give Mr. Gaultier a way around the requirements of the Companies Act. Laffoy J. explained that what had happened on the previous occasion had informed her decision on the 31st of July, 2012.

34. It is plain that that s. 231(1) of the 1963 Act is not applicable in this case. It provides as follows:-

“(1) The liquidator in a winding up by the court shall have power, with the sanction of the court or of the committee of inspection—

(a) to bring or defend any action or other legal proceeding in the name and on behalf of the company; …”

That provision is entirely unremarkable in the context of a liquidation, but it has no application here.

35. Mr. Gaultier made two arguments, however, as to why, notwithstanding the fact that he plainly fell outside the words of s. 231, an order should nevertheless have been made in his favour. First, he contended that s. 12B of the 1982 Act could somehow be employed in aid of his case. S. 12B is indeed the statutory section permitting restoration to the Register. He contended that, in some way which I must confess I found difficult to follow, because there was a procedure for restoring the company to the Register, and the company could therefore be revived with the capacity to bring proceedings, he should be able to benefit from s. 231 to commence the proceedings on behalf of the company. It does not appear to me that s. 12B is of any assistance to Mr. Gaultier: instead it stands as the obvious course which he has refused to adopt, and which would at least have allowed him to surmount the difficulty posed by the dissolution of the company.

36. Mr. Gaultier also sought to rely on Directive 2009/102/EC in the area of Company Law on Single-Member Private Limited Liability Companies (“the Directive”). Mr. Gaultier referred to Recital 5 which provides:-

“A private limited liability company may be a single-member company from the time of its formation, or may become one because its shares have come to be held by a single shareholder. Pending the coordination of national provisions on the laws relating to groups, Member States may lay down certain special provisions and penalties for cases where a natural person is the sole member of several companies or where a single-member company or any other legal person is the sole member of a company. The sole aim of this power is to take account of the differences which exist in certain national laws. For that purpose, Member States may in specific cases lay down restrictions on the use of single-member companies or remove the limits on the liabilities of sole members. Member States are free to lay down rules to cover the risks that single-member companies may present as a consequence of having single members, particularly in order to ensure that the subscribed capital is paid.”

37. Mr. Gaultier in these proceedings, and indeed in the earlier appeal, sought to contend that this provision means that the only penalty which could be imposed upon a single-member company was a removal of the limit of liability on sole members, and that therefore it was disproportionate to permit the dissolution of a company for failing to make statutory returns. He also contended that this was an issue of European law which was not clear, and which accordingly would require a reference to the Court of Justice of the European Union (“the CJEU”) pursuant to Article 267 of the Treaty on the Functioning of the European Union.

38. It is, I think, plain that this argument is entirely misconceived. Apart from the fact that what has been set out above is merely a recital to the Directive, I consider that what is clear is that Mr. Gaultier is misinterpreting the provision. There is, first, no suggestion that single-member companies should not be subject to the regulation which applies to other companies. What the recital addresses is the possible abuse of single-member companies where, for example, a natural person is the sole member of several companies or a single-member company is, in turn, the sole member of another company.

39. In those circumstances, Member States may, but were not required to, lay down restrictions on the use of single-member companies or remove the limits and liabilities of the sole members. Nothing in the recital supports the contention advanced by Mr. Gaultier and, accordingly, I am satisfied that there is no issue of European law which would require a reference to the CJEU.

40. Returning to the substance of the matter, I consider that the decision of Laffoy J., given on a particularly busy day, was impeccable as a matter of law. It is plain that s. 231(1) of the 1963 Act cannot be invoked by a person who is not a liquidator, and outside a winding-up. Furthermore, it would have been an abuse of process to permit Mr. Gaultier to avoid both the rule in Battle and the consequence of dissolution by permitting him to commence proceedings in the name of a dissolved company without complying with the statutory procedure for restoring the company to the Register. As Laffoy J. observed, that would have been to allow Mr. Gaultier to circumvent the plain requirements of the Companies Act. Accordingly, I would dismiss the appeal.

The third set of proceedings: Arnaud D. Gaultier v. Allied Irish Banks Public Limited Company, Supreme Court Appeal No.: 450/2012
41. In these proceedings, Mr. Gaultier sought to issue proceedings on his own behalf or on behalf of Loire Valley Limited in respect of an alleged breach of contract by Allied Irish Bank plc (“the Bank”). The indorsement of claims sought the following relief in respect of Mr Gaultier’s own claim against the Bank. It is apparent however, that the claim arises out of a withdrawal of service “before the expiry of the due given notice and against the principle of reciprocity of terms”. A total of €44,000 was claimed personally under the following headings:

(a)

Loss of good will

€ 2,000

(b)

Damage for loss of value of property

€40,000

(c)

Damage for inconvenience and harassment

€ 2,000

The second-named plaintiff, in this case Loire Valley Limited, claimed a total of €127,542.69 as follows:-

(d)

Damage for loss of business during business interruption consecutive to the breach of contract (from August 06 to February 07)

€35,125

(e)

Provision for loss of business during reestablishment of business to where it should be after the said business interruption (from March 07 to February 08)

€91,817

(f)

Loss of good will

€ 2,000

(g)

Additional expenses: for research and arrangement of new bonded warehouse facility

€ 2,000

Total:

€130,942

Then allowing a deduction of debit left on account of €3,399.31, producing the total claim of €127,542.69.

42. Greater detail is apparent from an affidavit sworn by Mr Gaultier described as “setting out Ground of Plenary Summons” and containing two exhibits. It appears from a reading of that affidavit that the Bank had agreed to provide minimal facilities to the company, and in particular a bank guarantee to the Revenue Commissioners (presumably in respect of bonded products) for €300. In April, 2006, that was extended to €2,000 and a credit facility in the sum of €1,500 allowed. A personal savings account had also been opened in August, 2005.

43. On the 8th of August, 2006, however, the Bank notified the company that all banking facilities would be withdrawn after the expiry of a three-week period on the 29th of August, 2006. This, in itself, however, was not the basis of the claim. Instead, it is contended that, before the expiry of the notice period, the Revenue Commissioners withdrew the bank guarantee to the Revenue Commissioners on the 10th of August, 2006. It is said that it is a consequence of the breach of contract, negligence, and breach of duty that the company suffered and endured the following: business interruption with loss of customers; the cancellation of a non-proprietorial warehouse keeper between Drink Trade Logistics (“DTL”) and the Office of the Revenue Commissioners; the cancellation of a transfer of the full stock to DTL premises worth in excess of €50,000; and the detention of the full stock of wine by Customs and Excise for the Revenue Commissioners awaiting for new facilities to be arranged.

44. The exhibits to the affidavit contain a letter of the 8th of August, 2006, from the Bank to the secretary of the company, informing them that the Bank was exercising its contractual right to close the account maintained with the branch from the close of business on the 29th of August, 2006, and that the company should arrange alternative banking facilities.

45. A letter of the 16th of August, 2006, from the Revenue Commissioners to Mr. Gaultier at the company, was also exhibited and refers to an e-mail of the 11th of August which, it appears, in turn referred to the cancellation of the bank guarantee and also the cancellation of the company’s direct debit deferred payment arrangement by an entity referred to as “A.E.P. bureau”.

46. The letter set out three options in respect of duties suspended excisable product held by the company at the tax warehouse of Wincanton, namely: to pay all excise duty and VAT on the above-mentioned product; to return it to suppliers; or, alternatively, to sell the product to an excise trader properly approved to hold duty suspended excisable product. The letter also recorded that the only correspondence from the company had indicated that the possibility of liquidating the company was being considered. No reference had been made to the duty suspended excisable product. The company and Mr. Gaultier were notified that if one of the options offered was not taken in respect of the duty suspended excisable product before the closure of the Wincanton Tax Warehouse, it was Revenue’s intention to move this product to the State Warehouse.

47. From this limited material, a number of things are nevertheless apparent. First, it appears that the core of the dispute is that it is suggested that a bank guarantee in favour of the company in a modest amount was cancelled prematurely, along with a direct debit. It is not apparent how this could give rise to any claim on behalf of Mr. Gaultier personally. Furthermore, given the dates involved, it is plain that a very significant issue arose in relation to the Statute of Limitations since the alleged breach appeared to have occurred in August, 2006.

48. Mr. Gaultier sought to issue proceedings on the 9th of August, 2012, which, on the basis of the allegation of breach set out in the plenary summons, was the very last day upon which proceedings could be commenced. It appears that the Central Office refused to accept the proceedings because one of the plaintiffs was a limited company which was not represented by a lawyer, applying, in this respect, the decision in Battle. As it happens, there was a more fundamental problem because, as we now know, the company at that point stood dissolved.

49. It appears then that Mr. Gaultier appeared in the High Court on the 9th of August, before de Valera J., who was sitting as the “vacation duty” judge. It is apparent from both the official transcript and Mr. Gaultier’s own transcript that the judge made considerable efforts to try and understand what was, on any view, a rather unusual application, and furthermore had considerable difficulty in understanding Mr. Gaultier both in relation the detail of his argument, and because of his strongly accented English. This is an observation, and is in no sense a criticism, of Mr. Gaultier, who was seeking to take some complex steps in a legal system in which he was not qualified and with which he was unfamiliar through a language which was not his mother tongue. It seems clear, however, that these difficulties contributed to the confusion in court on that day.

50. The judge struggled manfully to understand the nature of the application. First, he said that he did not understand why the plaintiff needed the leave of the court to issue proceedings. He was told by Mr. Gaultier that the Central Office had refused to accept the summons by reference to the “decision of the Supreme Court 1963”, which must be a reference to the decision in Battle. Mr. Gaultier then referred to the expiry of the limitation period. The judge sought to ascertain the date upon which the limitation period would expire. He then asked, perhaps not unreasonably, why Mr. Gaultier had left it until the very last minute to commence proceedings.

51. At that point, there was a further unfortunate turn in that Mr. Gaultier referred to his application before Laffoy J. on the 31st July, and said, revealingly, that because of “the 1963 decision” he had “tried to make some application in other ways tried to get permission of the court on a general basis, I did that on the 31st of July with Ms. Justice Laffoy, an application on a general basis to represent the Company in a court of law …”. At this point, the judge enquired if an application had been made to Laffoy J. to allow him to represent the company and if that application was refused. When Mr. Gaultier confirmed this, the judge enquired if the application had been appealed and Mr. Gaultier replied:- “not yet because there’s the four-day rule of appeal”.

52. The judge then reverted to his concern that he did not understand why the Central Office would not accept lodgement of the entry of a plenary summons and the following exchange took place:-

“Judge: Well, representation is different from filing, insofar as I can understand your application to me. Appearing in court on behalf of the Company is one thing. Lodging documents on behalf of the company is different. I don’t know why the Central Office won’t accept documents that you’re lodging. That’s my difficulty, and I can’t make an order until I understand what I am doing.

Mr. Gaultier: Should I go back to them?

Judge: Well, it might be a good idea. If you can get some more information that will help me. I’ll still be here, and I’ll deal with it insofar as I can. My difficulty is I don’t know why they’re not allowing you to enter plenary summons on behalf of yourself or the Company and until I know that, I can’t deal with the matter. My Registrar tells me that these documents have to be lodged by a solicitor and that that’s the relevant rule of court. If that is the relevant rule of court, I can’t, unless there is a provision that you can show me in the rules that allows me to circumvent to overcome that rule or difficulty, I can’t give you permission. It might be a good idea in the circumstances to reconsider your situation in relation to a solicitor. It shouldn’t be too expensive to get a solicitor to just do this one particular aspect of the matter.

Mr. Gaultier: Thank you.

Judge: I’m sorry I can’t be of more assistance to you.”

53. The order of the High Court was made up and provided:-

“Upon Motion of the first named Plaintiff in person made ex parte to the Court on this day for leave to issue the within proceedings and upon reading the Affidavit of Arnaud D Gaultier sworn 9th day of August 2012 and the documents and exhibits referred to therein and the draft Plenary Summons herein and upon hearing said first named Plaintiff in person the Court doth make no Order herein and noting the fact that one of the Intended Plaintiffs is a Limited Company indicates to the first named Plaintiff the necessity to engage a Solicitor for the purpose of filing the intended proceedings”.

The judge’s note, obtained by Mr. Gaultier for the purposes of this appeal, records that Mr. Gaultier was a French national who spoke English with a heavy accent and that Mr. Gaultier first appeared in the morning and the judge “persuaded him to return to the Central Office to try and regularise his position”. It is recorded that Mr. Gaultier then returned again in the afternoon and the judge pointed out to him that it was necessary to retain the services of a solicitor. He concluded:-

“I did everything reasonably possible to emphasise to Mr. Gaultier the necessity of obtaining proper legal advice and assistance but he either did not understand the importance of such advices or, perhaps, was unable to make the necessary arrangements.

As the intended matter was not embarked upon, no formal order was made”.

Battle v. Irish Art Promotion Centre Limited [1968] I.R. 252
54. The decision in Battle has loomed large in these appeals. Mr. Gaultier has strongly criticised the decision and must, I think, be taken as inviting the court to reverse it. It is true, as he says, that it is a short judgment taking no more than two pages of the Irish Reports, and is moreover a decision given a relatively long time ago.

55. However, any such argument faces a much more formidable hurdle in that the decision was recently reconsidered by this court in Allied Irish Bank plc v. Aqua Fresh Fish Ltd. [2018] IESC 49, [2019] 1 I.L.R.M. 19 (“Aqua Fresh”), and in a unanimous judgment of the court, Finlay Geoghegan J. upheld a decision of McKechnie J., sitting in the Court of Appeal (Ryan P. and Hogan J. concurring), that the rule in Battle continued to apply, subject, however, to an exception that it was acknowledged that a court had a discretion to be exercised in exceptional circumstances to permit a legal person to be represented by a natural person other than a barrister or a solicitor with a right of audience in the courts. This conclusion of law, it should be said, also accords with the general practice of the courts discussed in that judgment. Finlay Geoghegan J. considered the jurisprudence of the courts and the practice of permitting representations in cases to avoid injustice. She also carried out a careful survey of the law and concluded that it was more appropriate to speak merely of exceptional circumstances rather than rare and exceptional circumstances which had been a term hitherto employed (para. 42).

56. The judgment in Aqua Fresh also reviewed the law in other common law jurisdictions, and noted that an approach similar to that in Battle appeared to have been adopted in most other common law jurisdictions. In particular, in the United Kingdom it had been reaffirmed relatively recently in a decision of the Court of Appeal of England and Wales in Radford v. Freeway Classics Ltd.; Radford v. Samuel & Anor. [1994] 1 B.C.L.C. 445. Sir Thomas Bingham M.R. (as he then was) explained that the practice was not a freestanding rule designed to buttress the right of audience of members of the legal profession. It was, instead, a corollary of the fundamental feature of company law that a company is a separate legal entity from its shareholders. It followed that whereas a natural person can appear in court either through a lawyer with a right of audience or by himself or herself, an artificial legal person does not have the option of appearing personally and, rather, can only therefore appear through a solicitor or barrister with a right of audience.

57. Furthermore, the capacity to limit the liability of a company, which is one of the very valuable benefits of the capacity to incorporate, has consequences as well as advantages. As Sir Thomas Bingham M.R. (as he then was) put it, the rule rested on “a basis of fairness and good sense”. In a passage, cited with approval by Finlay Geoghegan J., he said:-

“A limited company, by virtue of the limitation of the liabilities of those who own it, is in a very privileged position because those who are owed money by it, or obtain orders against it, must go empty away if the corporate cupboard is bare. The assets of the directors and shareholders are not at risk. That is an enormous benefit to a limited company but it is a benefit bought at a price. Part of the price is that in certain circumstances security for costs can be obtained against a limited company in cases where it could not be obtained against an individual, and another part of the price is the rule that I have already referred to that a corporation cannot act without legal advisors. The sense of these rules plainly is that limited companies, which may not be able to compensate parties who litigate with them, should be subject to certain constraints in the interests of their potential creditors.”

58. In any event, whatever justification is to be found for the rule, it is clear that it has recently been reaffirmed in a number of jurisdictions, and most recently in this court. Accordingly, any contention that it should be overruled cannot possibly succeed.

59. The argument that the law could not apply, or perhaps should not be applied, to single-member companies has no greater merit. It is clear that this does not distinguish the company from those companies discussed in the Aqua Fresh and Battle cases. Any such company has the two essential features of separate corporate identity and capacity to limit liability that were identified as underpinning the rule. There is no suggestion in Aqua Fresh that the principle set out there is not of general application to all corporate entities.

60. However, Mr. Gaultier also argues, at least as I understand it, that if Aqua Fresh now establishes that there is an inherent jurisdiction to permit an individual to represent a company in certain circumstances, then the very existence of that discretion means that he should have been permitted to issue the plenary summons as otherwise he would not have been in a position to argue in court that the inherent discretion of the court should be exercised in his favour.

61. It is necessary to return to the events which occurred on the 9th of August, 2012, as recorded in the transcripts. The judge plainly struggled to understand precisely what was being sought and the problem which had arisen. That is not surprising. There was only an oblique reference to a “legal precedent of 1963”, the reference to the hearing before Laffoy J. was potentially confusing and unhelpful, and there was only a general reference to a “rule of court”. The judge correctly expressed some puzzlement that the plenary summons had not been issued and, while offering to assist Mr. Gaultier as far as possible, understandably expressed some concern that the application was being made at the last minute without any explanation as to why no attempt had been made to commence proceedings earlier, but finally made the practical suggestion that, insomuch as it appeared that the absence of a solicitor was preventing the urgent issuance of the plenary summons, perhaps a solicitor might be retained at least for the limited purpose of issuing those proceedings.

62. The judge cannot be criticised for anything said or done in the case, nor for failing to appreciate that the rule in Battle was concerned, or that it was being applied by the Central Office to the issuance of proceedings, and still less that, some six years after the short and rather unsatisfactory hearing in the High Court in 2012, this court would make it clear in Aqua Fresh that, while the general rule remained, there was an inherent discretion to permit an individual to appear on behalf of a company.

63. A judge that has received no papers or any advance warning of the issue to be raised on an ex parte application like this will not know even the area of law to be addressed, still less the precise issue, and accordingly is very dependent on a clear, accurate, and fair account of the issue from any applicant whether represented or not.

64. Nevertheless, it does appear to me that once it is accepted that there is a jurisdiction to permit an individual to appear and represent a company, even in exceptional circumstances, it must follow that the practice of blanket refusal to permit the issuance of proceedings, or indeed the entry of appearance to such proceedings, by or on behalf of a company is too rigid. Mr. Gaultier has also drawn to our attention two orders, one made in 1999 and the other made in 2000, by Kelly J. (as he then was) which appear to have given liberty to an individual to issue proceedings in the name of a company on this basis.

65. It appears to me that this precedent, had it been brought to the attention of the High Court judge, is one which could have been followed. Indeed, I should say that had the matter been set out as clearly and as painstakingly to the High Court judge as it has been on this appeal, and the materials assembled for this appeal put before him, I do not doubt that he would have taken this course. It is clear that the judge wished to assist Mr. Gaultier so far as he could to avoid having the claim statute-barred.

66. It remains to consider what order should now be made. As the trial judge observed, the application did not proceed, and in that sense no order was made, but insomuch as it can be said that an application was being made for leave to issue proceedings, then I think the order must be taken as refusing Mr. Gaultier leave to do so. It is not clear, however, that any useful purpose would now be served by setting aside that order, since the statute of limitations, which Mr. Gaultier calculated was about to cause his claim to expire on the 9th of August, 2012, must in all probability have now run.

67. Furthermore, Mr. Gaultier properly brought to our attention that in any event he had taken the precaution of issuing separate Circuit Court proceedings because, at least as I understood it, he had found that it was possible to issue the proceedings in the Circuit Court without the co-operation of the Circuit Court Office or the permission of any judge. Insomuch as those proceedings may still be extant or have proceeded, they would not allow any issue of fact or law to be ventilated. Indeed, it would not normally be possible to have two sets of proceedings in being litigating precisely the same issue.

68. Furthermore, and in any event, as already observed, the rule in Battle reaffirmed in Aqua Fresh is not the most substantial problem facing any proceedings. The claim, whatever its merits, seems entirely related to the withdrawal of a guarantee provided for the company and the impact it is said that withdrawal had on the business of the company. However, as of the 9th of August, 2012, the company was dissolved and could not have commenced proceedings even if represented by a full team of lawyers, and the Battle issue did not arise.

69. Nevertheless, Mr. Gaultier has appealed against the order of the 9th of August, 2012, insomuch as it is to be treated as an order refusing him leave to issue proceedings in which he was named as an individual co-plaintiff. It might be said that the refusal to permit the issuance of the proceedings could be justified on other grounds, namely the non-existence of the company, but that issue was not visible in the proceedings of the 9th of August, 2012. Furthermore, it is not at all clear how, even on every assumption favourable to him, the events described could give rise to any personal claim.

70. But Mr. Gaultier has clearly engaged in litigation on a number of fronts, and has become critical and suspicious of the procedures of the courts. It is apparent that much of his difficulty can be traced to his original unwillingness to follow a simple procedure for restoring a company to the Register and that his repeated, if ingenious, applications and proceedings have only increased the complexity of the net of entanglement in which he is caught.

71. Nevertheless, it is important, perhaps particularly in a case such as this, that the law be scrupulously applied. In those circumstances, I propose to allow the appeal and to set aside the order of the 9th of August, 2012, even though, for the reasons already touched on, that can have no practical or beneficial consequence, and if Mr. Gaultier were now to issue the proceedings they would appear doomed to failure on multiple grounds.

72. Finally, it is perhaps appropriate to comment on one further aspect of the case. While it is not set out in detail in this case, it does appear from the background set out above that Mr. Gaultier may have suffered some loss which moreover may have led to an offer of settlement from the Revenue which, as now appears, ill-advisedly, Mr. Gaultier or the company refused to accept. The flurry of litigation activity in July and August of 2012 may have been prompted, at least in part, by a desire to get back to that point. It now appears likely that any possible claim would be long since statute-barred.

73. However, it may be that if Mr. Gaultier were even now to take the step of seeking to restore the company to the register and comply with all necessary formalities, and if the company itself had no liabilities, that it might be possible, in those circumstances, that the Revenue Commissioners would consider making some payment, on an ex gratia basis, if it were the case that they were satisfied that there had been any error on their part which had caused loss to the company.

74. I raise this matter somewhat tentatively for two reasons. First, we have only heard one side of the story, and then only part of it. Even then, this aspect was not central to the particular appeals before us and it may well be that the situation is much more complex than the simple outline set out above might suggest. Second, courts can only deal with legal rights and remedies and plainly the question of any discretionary payment would be a matter entirely for the Revenue Commissioners and only if they considered that that was an appropriate step.

75. Nevertheless, I make this suggestion because it is plain that Mr. Gaultier has devoted considerable time and effort to the pursuit of litigation, most of which now appears to be coming to an end without providing any satisfactory resolution for any genuine grievance he has. He would, perhaps, be better advised to pursue a course of compliance with the statutory requirements, and cooperation, negotiation, and, if possible, compromise. Had he taken this course years ago, it is possible that he, through his company, would be much better off. Even now, it may be a more productive focus for his efforts.

76. For the moment however, I would make the following orders:

(a) Dismissing the appeal in the first set of proceedings, Supreme Court Appeal No.: 353/2012: Gaultier v. Registrar of Companies from the order of Murphy J. of the 19th of July, 2012;
(b) Dismissing the appeal in the second set of proceedings, Supreme Court Appeal No.: 449/2012: In re.: Arnaud D. Gaultier and the Companies Act 1963-2009 from the order of Laffoy J. of the 31st of July, 2012; and
(c) Allowing the appeal in the third set of proceedings, Supreme Court Appeal No.: 450/2012: Gaultier v. Allied Irish Banks plc from the order of de Valera J. of the 9th of August, 2012, refusing leave to issue proceedings.

Hickey -v- McGowan & ors

[2017] IESC 6 (09 February 2017)

Judgment of O’Donnell J. delivered the 9th February of 2017
1 The emergence of the phenomenon of historic sexual abuse of children, and in particular abuse carried out by clergy and members of religious orders, has had a profound impact in many countries around the world, not least Ireland. That impact has also been felt in the law, which has struggled to deal with the very many issues thrown up by proceedings both civil and criminal. In the field of criminal law, the prosecution of offences alleged to have occurred many years previously, on extremely limited evidence, sometimes in circumstances where evidence of the principal complainant has been the product of a process of recovery of memories through therapy, raises many issues. In civil cases different though no less intractable problems arise. First, and most obviously, I think it is now well accepted that a feature of abuse committed against young children is that it may take considerable time for a victim to be in a position to acknowledge the fact of abuse, and be prepared to institute proceedings. Indeed this was treated as almost a matter of judicial knowledge in the judgment of Murray J. (as he then was) in the important case criminal law case of P O’C v. DPP [2000] 3 I.R. 87, at p.105. However, the lapse of time which often occurs between the matters complained of, and the bringing of proceedings, raises issues not simply of the Statute of Limitations, and of the fairness of proceedings, but also, the less well recognised practical problems of identifying a defendant against whom an action obtained and who or which may not have sufficient assets to meet any claim for damages. It is in the nature of claims such as these that they will involve a complaint of abuse by an adult against a young child, some time ago. Almost inevitably, defendants against whom proceedings are now sought to be brought, may be old, and in some cases deceased, or may have few assets, and therefore, it either may not be possible, or practical to bring proceedings and maintain them to conclusion.

2 As a result, proceedings are often most vigorously contested not between the alleged victim and the abuser, but rather between the victim, the claimant, and an institution which can be a corporate body, the State, or a body with the benefit of an insurance policy – and all of which have in common that they may have a longer life expectancy than the individual whom it is sought to make responsible for the wrongdoing. There is something questionable, at least in my view, in companies and institutions being made liable long after the event for matters, in respect of which no claim could now be brought against the persons who actually perpetrated the wrongs, but that is perhaps an unavoidable consequence of different rules of law relating to the time limit for claims being brought against the estates of deceased persons, and the legal status of an incorporated body. It is however unavoidable that claims relating to historic matters such as those which occurred in this case more than 40 years ago, will encounter significant additional hazards over and above the inherent difficulties of proof which might arise even in cases where the alleged abuse occurred recently.

3 The question raised in this case of the potential liability of a religious order or its members at any identified point in time for wrongdoing carried out by another member raises complex questions, some of which have been the subject of extended analysis in the Supreme Courts of a number of common law countries. Among those issues questions of the limits of the developing law on both limbs of vicarious liability: first the person or persons who can be liable without individual fault or culpability on their part, for the tortious acts of another; and second, the particular acts for which a person or body may be vicariously liable. Behind both these questions lies a difficult question as to the legal status of a religious order, and its liability, or the liability of its members, for wrongdoing perpetrated by another member.

4 These are substantial and difficult issues which have been the subject of judgments in other jurisdictions of the common law world without any coherent or consistent pattern emerging. It will be necessary to address some of these issues later in this judgment. However it seems unlikely that any Supreme Court which is engaged with the issues which arise in this case, has been confronted with a factual record and procedural history as fragmentary and unsatisfactory as that in this case. Accordingly, it will also be necessary to deal with some issues of procedure and evidence. In order to understand both the complex issues of law which are thrown up by this case, and the difficulties of procedure which stand in the way of addressing those issues, it is necessary to set out the facts and procedural history in some detail.
The Facts
5 The underlying facts of these proceedings have been set out in a judgment of the High Court (Ó’Néill J.), [2014] IEHC 19, delivered on the 24th of January, 2014. In essence the plaintiff was born in 1960, grew up in Sligo Town and attended St John’s National School for four years. For his last three years at the school from 1969 to 1972, he was taught by the second named defendant who was then a Marist Brother. The first named defendant is the present Provincial of the Marist Order. By modern standards there were a high number of pupils, in excess of 50 and sometimes over 60, in the class attended by the plaintiff, and taught by the second named defendant. The classroom was crowded and there were pupils’ desks immediately in front, and sometimes at the side, of the teacher’s desk.

6 It is unhappily the case that the courts are now familiar with the accounts of child abuse which can give rise to proceedings in both civil and criminal law. Many of them follow a depressingly familiar pattern. What is perhaps unusual about this case is that it was alleged by the plaintiff and other boys in the class that the abuse occurred in the classroom. The plaintiff contended that he would be instructed by the second named defendant to come to the top of the class, close to his desk, on the pretext of reading to the class or being assisted in learning by the second named defendant. The second named defendant held the plaintiff very close to him and would rub his legs which evolved into fondling of his anus and genitalia, initially outside his clothes but then inside his clothes, and sometimes inserting a finger into the plaintiff’s anus. Sometimes the plaintiff described the second named defendant placing a gown or cape type garment which he sometimes wore around the plaintiff to obscure his activities from view. On one occasion, the plaintiff said the second named defendant placed what the plaintiff described as his “belt” around the plaintiff securing him to the second named defendant. The plaintiff said these activities occurred several times every week and they were a cause of great upset to the plaintiff and that he was powerless, in the context of what was described as the position of authority of the second defendant and his close relationship with the plaintiff’s family, to do anything about it, and that he lacked the language to express his distress.

7 It is the nature of sexual abuse that it often occurs in private and secluded circumstances. Here, however it was alleged by the plaintiff, and found by the High Court, that the abuse took place largely in public and significantly the plaintiff’s evidence in this regard was corroborated by four other boys who had been in the class. Again, somewhat unusually, the alleged abuser, the second named defendant, gave evidence and denied any abuse. The High Court judge accepted the evidence of the plaintiff and the degree of corroboration provided by the evidence of the other boys, and rejected the second named defendant’s denials. Accordingly he concluded that the plaintiff had indeed been abused by the second named defendant. Although these matters were the subject of considerable contention during the course of the trial, and occupied much attention during it, they are not now in issue for the purposes of this appeal and the matters debated between the first named defendant and the plaintiff. Accordingly, the starting point for this Court, is the finding that the plaintiff was abused by the second named defendant.

8 The trial judge accepted that although the plaintiff had no memory of the events until contacted by the gardaí in the course of a criminal investigation, nevertheless it is now clear that these matters had a significant impact upon him and his life and indeed that the fact that the plaintiff blocked the matter out of his memory illustrated how traumatic the abuse was for him. In the circumstances the High Court assessed general damages against the second defendant at €250,000 to date, and €100,000 in respect of general damages in the future, totalling €350,000. However, that brought the Court to the issue which has been central to the appeal, as to the liability of any other party, and in particular the first named defendant, for the abuse committed against the plaintiff. In order to consider that matter, and in particular the claim that the first named defendant was vicariously liable for the damage suffered by the plaintiff, it was necessary to examine the status of the first and second named defendants vis-à-vis each other, and the position of the second named defendant in the school, and the contractual and other relationships governing his position.

9 The evidence in this regard was fairly scanty. It is however not now in dispute that at the relevant time between 1969 and 1972, the second named defendant was a brother in the Marist congregation. As such he had taken vows of chastity, poverty and obedience. The Marist congregation had a hierarchical structure which was international, provincial and local. The second named defendant was subject to the authority of the Superior in the house to which he belonged. The congregation of Marist Brothers was divided into provinces, each province having at its head a provincial. St. John’s National School in Sligo was a national school subject to the prevailing legal regime for the governance of national schools discussed in the judgments of the Supreme Court in O’Keeffe v. Hickey [2009] 2 IR 302. Evidence was given by Father Hever, the current administrator of the cathedral parish in Sligo, in which parish St. John’s National School was located. The administrator of the parish on behalf of the Bishop, who was the patron, was the manager of the school, and it was he who discharged the function of legally appointing teachers to the school, including the principal. The curriculum pursued and the academic standards required was regulated by the Department of Education which operated the school inspectorate system.

10 In the words of the trial judge, the school was “a Marist school” in the sense that the principal was a Marist Brother and the teachers in it at that time were nearly all Marist Brothers. They were selected for their positions, and directed to take up those positions, by the provincial of the Marist Brothers in Ireland. That congregation was dedicated to the care of the young and in pursuit of this primary objective, the principal activity engaged in was teaching. In essence therefore, the school was a national school with a manager who was the legal employer of teachers: those teachers were supplied by the Marist Order. The trial judge concluded that the day to day control of the activity of a teacher would have rested exclusively within the realm of the Marist congregation; initially between the teacher and the principal of the school, and if issues were not resolved within that relationship, then within the hierarchal structure of the Marist Order. Only in the extraordinary circumstances of a Marist Brother defying the authority of his superiors in the congregation would it have been necessary, the trial judge considered, to have involved the manager of the school to resolve problems or difficulties in connection with the discharge by the teaching brother of his teaching duties. The judge considered that the Marist congregation had therefore full control on a daily basis over the management of the national school in the relevant years.

11 The trial judge referred in his judgment to a then recent decision of the United Kingdom Supreme Court in the case of Catholic Child Welfare Society and Ors. v. Various Claimants (FC) and Ors. [2012] UKSC 56 (“CCWS”) which had been delivered on the 21st November, 2012, very shortly before the hearing in this case commenced. There is no doubt that the High Court relied heavily upon the analysis in that judgment. Indeed the appellant contends that in the absence of an adequate evidential foundation in the case itself, the plaintiff resorted to the CCWS case not just to supply a legal analysis for imposing liability but also to fill the evidential gaps in the case. In the event, the High Court concluded that the Marist Order had control of the school on a day to day basis, and that “the well-known identity of the Marist Congregation can [not] simply disappear in to the sands of unincorporated association”. Accordingly the judge stated at paragraph 69:

“I would follow the reasoning of Lord Philips in the CCWS case and hold that it is right to approach this case on the basis that the Marist Brothers were a corporate body existing to perform the function of providing a Christian education to boys and that the first named defendant is sued as a representative of that body, which is vicariously liable for the tortious acts of the second named defendant.”
12 The High Court then turned to the plea made on behalf of the first named defendant, and held that the relevant manager was also vicariously liable as the effective employer of the second named defendant. However the plaintiff had not sued the manager, and the action was now statute barred by virtue of s.9(2) of the Civil Liability Act 1961, and the liability of that party was to be attributed to the plaintiff by virtue of the provisions of s.35(1) of the Civil Liability Act 1961 which, so far as is relevant, provided that for the purposes of determining contributory negligence where the plaintiff’s damage was caused by concurrent wrongdoers and the claim against one had become statute barred, the plaintiff should be deemed responsible for the acts of such wrongdoing. The High Court judge concluded that the manager was however only 10% responsible, and accordingly the damages against the second named defendant were reduced by €35,000 to €315,000.
The Procedural History
13 The progress of this case has been a depressing story of inadequate pleading, missed opportunities, lack of clarity, confusion and error. The plaintiff had been living in Cornwall in the late 1990’s and was alerted to the events in his childhood by the visit of the gardaí then investigating allegations of child abuse in the school. He cooperated with the inquiry, became a witness in the criminal proceedings, and at some stage instructed solicitors to initiate civil proceedings. A letter was prepared addressed to the first named defendant (the Provincial), the second named defendant (the perpetrator) and the Attorney General, Ireland and the Minister for Education (the State parties). It does not appear however that the letter was ever sent to the first named defendant so he was not alerted to the claim at that time. A plenary summons was then issued on the 6th of February 2001 naming the five parties above as defendants. It appears however it was only served at the time on the second named defendant. Accordingly the state parties were unaware of the proceedings, and the first named defendant and accordingly the Marist Order more generally, were unaware of any claim by the plaintiff, until 2008. After this fitful and sporadic start the proceedings fell into abeyance. A statement of claim was sent to the State defendants with a demand that a defence be delivered. The defendants replied pointing out reasonably that no plenary summons had ever been served. Eventually in 2008, the plaintiff changed solicitors. The new solicitors brought an application to extend the time for service of the plenary summons. However they decided not to pursue a claim against the State defendants in light of the judgment of this Court in O’Keeffe v. Hickey now reported at [2009] 2 IR 302. In effect therefore the renewal of the plenary summons was critical to the claim against the first named defendant. It bears noting that seven years had been spent during which the sum total of the progress of the claim against the first named defendant was that a letter was prepared but not sent, and a plenary summons prepared but not served. This was in the context of a claim related to a period almost 30 years before the original date of the preparation of the plenary summons. The High Court nevertheless renewed the plenary summons and permitted service on the first named defendant. The first named defendant brought an application to set aside the order renewing the plenary summons, but this was unsuccessful.
The manner in which the claim was pleaded against the first named defendant.
14 The statement of claim identified the first named defendant as a Provincial of the Marist Order. The claim made against the first named defendant was that the Order was responsible for the wrongdoing of the second named defendant who was a member of the Order. This was a basic, not to say a rudimentary form of pleading the case. The defence by contrast was a much more elaborate document. It raised a number of issues but in respect of the issue which has most occupied time in this Court, the critical plea is that found at paragraph four:

“The Plaintiff discloses no cause of action as against the First named Defendant on the basis inter alia that the religious order described as the Marist Brothers is an unincorporated association, whose members are not liable in law, either directly or vicariously, for any act or default of each other. Further, and without prejudice to the foregoing, the current members of the Order are not liable directly or vicariously for any act or default of any member of the Order committed prior to their becoming members thereof.”
15 With the wisdom of hindsight it is possible to see, even at this stage and in this respect, that the issues between the parties had not been identified with the clarity which is desirable in every case, but essential in a case raising novel and complex issues of law. At the hearing we were also informed that there was an exchange of correspondence in which the plaintiff’s solicitors sought agreement from the first named defendant’s solicitors, that the first named defendant could be treated as a representative of the Marist Order. This was refused by the solicitors on behalf of the first named defendant. If the plaintiff’s advisors had in mind some form of obligation to compel this course, then nothing ensued and the proceedings meandered onwards. This pattern of sporadic and somewhat ineffectual efforts on behalf of the plaintiff which were met with a barrage of technical complications raised by the first named defendant characterised the progress of this case. However, a defendant is entitled to be punctilious, technical and difficult, though such a course is not without risk. There is no such excuse for ineffective efforts on behalf of a plaintiff. The terms of paragraph four of the defence, and the uncompromising position taken in the correspondence were unmistakable signals that real and difficult issues were going to be raised by the defendant and that the plaintiff could not rely on concessions or agreements or some tacit understanding that the first named defendant could be taken to represent the Marist Order. Questions as to whether the correct defendant has been sued are major traps for plaintiffs and their advisors. Such issues, particularly in a case where there has been a significant lapse of time, require to be addressed, but in this case it appears they were not.
The Hearing
16 The hearing commenced in November 2012, and occupied eight days in the High Court. The plaintiff’s case focussed essentially on matters of fact. This may have been a consequence of the fact that unusually the second named defendant was represented in the proceedings and adopted an approach bearing similarities to the defence in the criminal trial and which involved a stubborn refusal to concede anything. It may have been assumed, therefore that the difficult issue was proof of abuse as a matter of fact, and that once established it would be follow that the first defendant would be liable. However, the first named defendant for its part raised a number of technical and substantive issues. Counsel for the first named defendant has suggested that the emergence of the judgment in the CCWS case just days before the commencement of the hearing was treated by the plaintiff as a form of deus ex machina which solved all legal problems. Counsel for the plaintiff in this Court (who it should be said was not involved in proceedings before this appeal, and who argued the appeal with skill and tenacity) sought to advance the narrow argument that while the evidence was sparse, there was enough evidence to permit the High Court to reach the conclusions it had, and those conclusions were now effectively beyond challenge in this Court. I cannot agree that this narrow approach is a satisfactory way to resolve an already tangled case. It is necessary therefore to address in some detail the argument advanced by the first named defendant.

17 The evidence on the question of the organisation of the Order and the interaction of the Order with the school, was sparse indeed. Discovery had not been sought. The only evidence on the issue seemed to be gleaned indirectly from the evidence of the second named defendant himself, and from Canon Hever who was the manager of the school. Apart from seeking to exploit evidence from these witnesses (who had not been called by the plaintiff) the plaintiff adduced direct evidence from a theologian recruited apparently only a day or two before the High Court hearing began. That evidence was at a level of exceptional generality about the constitution of religious orders. Given the dearth of evidence the first named defendant argues that the plaintiff and subsequently the High Court, were driven to rely on the decision in CCWS not just as providing a template for legal analysis, but even to fill the evidential gaps in the case. There is in my view more than a little merit in this criticism.

18 The first named defendant argues that O’Keeffe v. Hickey requires “intense concentration” on the facts of the case to allow a conclusion to be drawn on the controversial issue of vicarious liability for sexual abuse carried out by another party. Nothing further from such intense scrutiny of the facts could be imagined, it was said, than the threadbare fragments of evidence gathered together in this case. The first named defendant contends that there was simply no evidence allowing the Court to conclude that the school was under the control of the Marist Order, particularly when there was a manager in place who had a legal obligation to run the school and who was in law the employer of the second named defendant. Furthermore, the first named defendant argued that the CCWS case was itself in fact a vivid illustration of the inadequacies of the plaintiff’s case here. There, a large number of individual defendants had been sued, discovery obtained, and detailed evidence given as to the operation of the school and the involvement of the various parties in it. In addition, important concessions were made by the representatives of the religious order in that case. Furthermore, and in any event, the defendant contended that the factual and legal circumstances involved in the CCWS case, were markedly different. If, as was agreed, the issue involved intense concentration on the facts, then it was argued it was an impermissible departure from such an approach, to treat the CCWS case as analogous to this. In particular, CCWS involved a residential school for troubled children who were particularly vulnerable. The staff, in that case the religious brothers, were on the site and in close contact with the children 24 hours a day, and provided a form of parental care. Here by contrast, the case involved a standard national school which was a day school in a substantial provincial town in Ireland. There was no suggestion that the children were particularly vulnerable. Contact was during school hours and as teachers. It negated the intense scrutiny approach emphasised by O’Keeffe v. Hickey if fundamental factual distinctions like this were to be ignored. Finally and in any event the first named defendant argued that even if the Court were to consider that the facts of CCWS were sufficiently close to this case to make it available as a precedent, the Court should nevertheless not adopt the approach in CCWS, which, it was argued was unduly vague and unprincipled.

19 The CCWS case is undoubtedly an important case in a sequence of recent cases at the highest level in courts of common law countries concerning the difficult question of liability for sexual abuse of children. However, a useful starting point in this jurisdiction is in my view the decision of this Court in O’Keeffe v. Hickey. That case involved a claim against a school teacher and the State parties, for sexual abuse carried out in a national school. Judgment in default of pleadings was obtained against the school teacher. The only issues therefore remaining in O’Keeffe v. Hickey were in regard to the direct liability or the vicarious liability of the State parties. Significantly, proceedings had not been issued against the manager or patron of the school, there, as in most cases, the local parish priest and bishop respectively. The case involved a very careful analysis of the unique structure of national schools in Ireland pre-dating independence. The High Court dismissed the plaintiff’s claim for direct liability on the part of the State parties for negligence in the management or inspection of the school. That decision was not appealed. Accordingly the only issue in the Supreme Court was whether the State was vicariously liable for the wrongdoing of the principal which for the purposes of the proceedings was now established. Geoghegan J. was prepared to hold that the State parties were vicarious liable for the sexual abuse. The majority of the Court however dismissed the claim. Two substantial judgments were delivered by Fennelly and Hardiman JJ. which came to the same result but for very different reasons. It is I think clear that it is the judgment of Fennelly J. (with whom Murray C.J. and Denham J. (as she then was)) which represents the majority view on the law of vicarious liability for sexual abuse. However, Hardiman J.’s powerful judgment (with which Murray C.J. also agreed) is in my view very useful in identifying the critical issues argued and determined in the Supreme Court, and casts a useful light on the judgment of Fennelly J.

20 Hardiman J. reviewed the development of the law of vicarious liability. He pointed out that vicarious liability represents liability without fault for the wrongful acts of another. It is a threshold question in any case in which the law of vicarious liability is sought to be expanded, to determine why a person or body who may be liable if shown to be at fault, should be made liable without fault or culpability of any kind. The classic case of vicarious liability is the responsibly of an employer for the acts of an employee. There is of course no difficulty in imposing liability on an employer whose employee acts on his or her instructions. But liability could also attach for unauthorised acts, and indeed acts contrary to the employer’s instructions. The test was first formulated by the distinguished authors of Salmond and Heuston on the Law of Torts, and repeated for much of the 20th century. It is set out, for example, at pp. 521 to 522 of the 19th edition, Heuston & Buckley, Salmond and Heuston on the Law of Torts (London: Sweet and Maxwell, 1987) as follows:

“An employee’s wrongful conduct is said to fall within the course and scope of his or her employment where it consists of either (1) acts authorized by the employer or (2) unauthorized acts that are so connected with acts that the employer has authorized that they may rightly be regarded as modes – although improper modes – of doing what has been authorized: Canadian Pacific Railway Co v. Lochart [1942] AC 591 at 599.”
This test contemplates some liability for unauthorised acts, but is still quite strict: the act may not have been expressly or impliedly authorised by the employer (indeed may have been forbidden by him or her) but liability may attach but only if the act is viewed as a “mode – although improper mode – of doing what has been authorized”. It is apparent that sexual abuse of a pupil by a teacher cannot on any version be considered to be merely an improper mode of doing the authorised task of teaching and nurturing a child. It is indeed the antithesis of what was authorised and intended, and amounts to a serious criminal offence. It is apparent therefore, that liability cannot attach to an employer for sexual abuse if the Salmond test is maintained.
21 In essence, Hardiman J. considered that the Salmond test should be maintained as he considered that the policy justifications underpinning it were justified, whereas he was sceptical of more expansive approaches which had found favour in other jurisdictions and among textbook writers on the basis that they ensured recovery of damages by a plaintiff who had suffered significant injury. At paragraph 41 of the judgment he said:

“I do not feel the unqualified enthusiasm which the authors evince for what they believe to be the modern theory of vicarious liability. The fact that a person or entity may have some resources (if only a private dwelling house) does not in and of itself, in my opinion, convert him, her or it, into a “deep pocket”. More fundamentally, even if the pocket is genuinely deep, that fact cannot in ordinary justice support the imposition of liability on such a person where it would not be imposed on a poorer person. And it is, with every respect, fatally easy for a writer in his study to dismiss another person as a “deep pocket” when that other is not such and does not so regard himself.”
(p.317)

22 Fennelly J.’s judgment can usefully be read in the light of the trenchant position adopted by Hardiman J. Fennelly J. pointed out that it was already well established law that an employer could be vicariously liable for the wrongful acts of an employee including criminal acts: Lloyd v. Grace, Smith & Co. [1912] 1 A.C. 716 and Johnson & Johnson (Ireland) Ltd. v. C.P. Security Ltd. [1985] I.R. 362. On balance, Fennelly J. was prepared to apply the close connection test which seemed to have been adopted by the majority of the House of Lords in Lister v. Hesley Hall Ltd. [2002] 1 AC 215 and the majority of the Canadian Supreme Court in Bazley v. Curry (1999) 174 D.L.R. (4th) 45:
“Ultimately, I am satisfied that it is appropriate to adopt a test based on a close connection between the acts which the employee is engaged to perform and which fall truly within the scope of his employment and the tortious act of which complaint is made. . . The close connection test is both well established by authority and practical in its content. It is essentially focussed on the facts of the situation. It does not, in principle, exclude vicarious liability for criminal acts or for acts which are intrinsically of a type which would not be authorised by the employer. The law regards it as fair and just to impose liability on the employer rather than to let the loss fall on the injured party. To do otherwise would be to impose the loss on the entirely innocent party who has engaged the employer to perform the service. The employer is, of course, also innocent, but he has, at least, engaged the dishonest servant and has disappointed the expectations of the person to whom he has undertaken to provide the service. There is no reason, in principle, to exclude sexual abuse from this type of liability. That is very far, as I would emphasise, from saying that liability should be automatically imposed. The decision of O’Higgins J. [in Delahunty v South Eastern Health Board [2003] 4 IR 361] provides an excellent example of a practical and balanced application of the test. All will depend on a careful and balanced analysis of the facts of the particular case. In Bazley v. Curry (1999) 174 D.L.R. (4th) 45 the employees of the care home were required to provide intimate physical care for the residents. The sexual abuse was held to be closely connected.”(p.378)
23 The power and depth of analysis in both judgments is apparent, but the significant divergence between them is obscured somewhat by the fact that the two judgments came to the same conclusion in O’Keeffe v. Hickey: the State parties were not vicariously liable for the criminal acts of the principal school teacher. On the facts of the case, it might be said that there was a connection and perhaps even a close connection between the abuse and the teaching – although as Fennelly J. observed the abuse took place during private lessons outside school time – but there was no sufficiently close connection between the State parties who were the defendants and the teaching in question. The result of the case was therefore heavily influenced by the distinctive structure of national school teaching in Ireland. In particular the existence of a management system which had both control over the teacher and was his employer, was particularly important. The existence of this employer weighed heavily against the State having vicarious liability on the analysis in both judgments.
24 Notwithstanding this coincidence of result, it is apparent that the reasoning of the two judgments diverges sharply and in an appropriate case would lead to quite different results. The debate between the two judgments can be seen more clearly if the issue of the liability of the school manager, which lay in the background to O’Keeffe v. Hickey, is considered. Although both judgments were careful not to reach any concluded position in that regard in the absence of any defendant in a position to argue the case, it is certainly much more likely that such a manager could have been found liable under Fennelly J.’s close connection test, and unlikely, perhaps highly unlikely that a manager could be found liable under Hardiman J.’s adherence to a strict “unauthorised mode of performance of the task” test. I think it is clear however that the judgment of Fennelly J. must be taken now to represent the law. This is not simply because it was agreed to by two other members of the Court, but, it must be recalled, Geoghegan J. delivered a judgment in which he would have dismissed the appeal and held the State parties to be vicariously liable.

25 However as already observed, in my view, the judgment of Hardiman J. remains important not simply because of its rigorous analysis, but also because it casts light on the judgment of Fennelly J. Therefore when Fennelly J. states that everything depends upon the facts of the case, and that the facts must be carefully analysed, he considered that the test he adopted was more expansive than that asserted by Hardiman J., but not decisively so. An employer may (not must) be liable for sexual abuse carried out by his employee or a person for whom he or she is vicarious liable.

26 A number of conclusions can be drawn from O’Keeffe v. Hickey which are important for this case. First, as already observed, the judgment of Fennelly J., and the close connection test must be taken to represent the law in Ireland. Second, even though there was not a residential component to the school and the children were not particularly vulnerable, it seems clear that that test was satisfied in this case. The abuse took place during the very act of teaching in the classroom. Indeed, this seems to have been tacitly accepted in this case insomuch as the case proceeded on the assumption that the manager employer was vicariously liable for the abuse. It follows therefore that there was a close and sufficient connection between the teaching carried out and the criminal abuse. Third, and perhaps most importantly, the issue which divided the Court in O’Keeffe does not therefore arise here. The question is not whether the act done is one for which a person is otherwise vicariously liable for the acts of another should be responsible i.e. whether on this occasion the employer or anyone else should be liable for an act of sexual abuse. That issue must be taken to be satisfied in this case both on an application of the close connection test in general, and the attribution of liability to the manager in particular. The question here for determination is a separate and perhaps anterior one: is the first named defendant either on his own behalf or as a representative of the Marist Order vicariously liable for the acts of the second named defendant (including in this case the sexual abuse)? That question, as we shall see, leads to another question as to the legal nature of a religious order, but for present purposes it is easier to treat the first named defendant Brother McGowan as essentially indistinguishable from the Order itself. The question therefore becomes whether the Order (or its members) is vicariously liable for the actions of a member. Taking the classic case of vicarious liability as the relationship between an employer and an employee, the question becomes whether the relationship between an order (or its members) and another member is such to give rise to vicarious liability for a wrongful act, it being accepted that if vicarious liability arises, it may, in an appropriate case, extend to acts of sexual abuse. That issue (and the related issue of the legal status of a religious order) were the subject of consideration in the CCWS case and it is not surprising therefore that the High Court judgment under appeal relied on the reasoning of the judgment of the Supreme Court of the United Kingdom, as indeed was stated expressly in the passage of the judgment set out at paragraph nine above. It is necessary therefore to consider that judgment in some detail.
Catholic Child Welfare Society and Ors. v. Various Claimants (FC) and Ors. [2012] UKSC 56.
27 The plaintiffs in these proceedings were pupils at a residential school in Yorkshire. Originally the school had been a reformatory, later an approved school for young offenders, and latterly an assisted community home for children in the care of the local authority. The school had been established initially by Catholic benefactors and at the relevant time was managed by two diocesan bodies responsible to the diocese of Middlesbrough who were the legal employers of the teachers and staff working there. The Institute of the De La Salle Order (referred to in the judgment as “the Institute”) had been invited by the diocesan bodies to run the schools. Members of the Order lived on the grounds of the school. The pupils were self-evidently vulnerable children placed in their care. However over a period of some 20 years boys were abused in particular by the headmaster who was later convicted of a series of offences in respect of his activities at the school. It is alleged that other pupils were abused by another brother. There were over 170 plaintiffs and the proceedings were in the nature of a test case.

28 In the proceedings the claimants sued the principal perpetrator as the direct tortfeasor and another 35 defendants who it was alleged were responsible in law for his wrongdoing. Those defendants could be divided in to two broad groups: the diocesan bodies who were the legal manager of the school and employer of the staff (“the diocesan bodies”), and members of the De La Salle Order (“the Institute”). A preliminary issue was directed to be tried on the vicarious liability of both sets of defendants. The High Court held that the diocesan bodies were vicariously liable for acts of abuse by staff but the Institute (or its members who were defendants) was not. This decision was upheld by the Court of Appeal. However, the Supreme Court of the United Kingdom in a unanimous decision, overturned the decision of the Court of Appeal and held that the Institute was vicariously liable along with the diocesan bodies for the sexual abuse carried out by the headmaster and other members of staff. There is a certain imprecision in the description of these defendants which, for reasons which will become clear, is unavoidable at this stage. However, for present purposes it can be said that the conclusion of the Supreme Court was that where sexual abuse was perpetrated on vulnerable children attending a residential school by a person employed by one body, and who was a member of religious order, both the employer and the order could be vicariously liable for that abuse.

29 The only judgment was that of Lord Phillips of Worth Matravers. He referred to a Court of Appeal decision in E v. English Province of Our Lady of Charity [2012] EWCA Civ 938 which had been decided shortly after the Court of Appeal decision in the CCWS case. The leading judgment in the E case had been given by Ward L.J., and to a large degree, Lord Phillips preferred the analysis in that judgment, to that of the Court of Appeal (and the High Court) in the CCWS case. The judgment commenced by observing that the Institute was as a matter of law an unincorporated association. However, he observed at paragraph 19 that “the law of vicarious liability [was] on the move”. The basic position as a matter of history was encapsulated in the “course of employment test”. Since that test had been developed however, the law had developed in a number of ways. Unincorporated associations had been held to be vicariously liable for the tortious acts of a member citing in this regard Heaton’s Transport (St Helen’s) Ltd. v. Transport and General Workers’ Union [1973] A.C. 15; Thomas v. National Union of Mineworkers (South Wales Area) [1986] Ch. 20, 66-7 and Dubai Aluminium v. Salaam [2003] 2 AC 366. Vicarious liability was possible even when the acts of the employee were unauthorised, in breach of duty to the employer, and even criminal. It was also possible for two (or more) defendants to be vicariously liable for the acts of another.

30 Any case of vicarious liability involves wrongful acts of one defendant (D1) and a determination that in addition another defendant (D2) who themselves are innocent of wrongdoing are nevertheless liable for the tort of D1. Lord Phillips explained that any determination of the existence of vicarious liability involved two separate but connected steps: firstly whether the relationship between D1 and D2 was such as to give rise to vicarious liability for any acts, and second, whether such liability could extend to certain acts or actions. The first question involved an analysis of the relationship between D1 and D2, and the second a consideration of the connection between the actions complained of and that relationship. Most focus in the CCWS case was upon the first question, that is the relationship between an individual brother and the Institute or Order. Lord Phillips also addressed the question of the status of a religious order, and as he described it, “the problem of the Institute” (Paragraph 27). This indeed had been a significant feature in the Court of Appeal decision which had held there was not a sufficiently close connection between the brothers of the Institute around the world and the torts committed by the brother teachers at the school in question to given rise to vicarious liability. This prompted Lord Phillips to raise the question of whether it was “right to treat the De La Salle Defendants as being simply an unincorporated band of brothers scattered around the world” (Para.27). This issue, as Lord Phillips noted, arose from the fact that the common law did not recognise the Catholic Church as a legal entity in its own right, but saw it as an unincorporated association with no legal personality and which held property through the mechanism of trusts. He addressed and resolved this question for the purposes of this case in three important paragraphs in the judgment:

“31 I can appreciate Hughes LJ’s difficulty in accepting that a De La Salle brother in Australia could be vicariously liable for the sexual assault by a brother at St William’s. Indeed, there is something paradoxical in the concept of an attempt to hold vicariously liable a world wide association of religious brothers, all of whom have taken vows of poverty and so have no resources of their own. So far as individual defendants are outside the jurisdiction this might also have given rise to an interesting question of conflict of laws. This is, however, a long way from the realities of these proceedings and Lord Faulks has not taken any point on the nature of the Institute.
32 It is open to the claimants on the pleadings to seek to establish vicarious liability on the part of an unincorporated association made up at the relevant times of the brothers world wide, or of members of the London Province, or of the England Province, or of the Great Britain Province. At the end of the day what is likely to matter will be access to the funds held by the trusts, or to insurance effected by the trustees. Whether one looks at the picture world wide, or within Great Britain, the salient features are the same. The Institute is not a contemplative order. The reason for its creation and existence is to carry on an activity, namely giving a Christian education to boys. To perform that activity it owns and manages schools in which its brothers teach, and it sends its brothers out to teach in schools managed by other bodies. The Institute is, for administrative purposes divided into Provinces, each administered by its Provincial. To carry out its activities it has formed trusts that have recognised legal personality. The trusts are funded in part from the earnings of those brothers who receive payment for teaching. The trust funds are used to meet the needs of the brothers and the financial requirements of the teaching mission.

33 It seems to me more realistic to view the brothers of the Province from time to time responsible for the area in which Market Weighton lies as members of the relevant unincorporated association rather than the Order as a whole, but I doubt if it makes any difference in principle. Because of the manner in which the Institute carried on its affairs it is appropriate to approach this case as if the Institute were a corporate body existing to perform the function of providing a Christian education to boys, able to own property and, in fact, possessing substantial assets.” (emphasis added)

31 Treating the individually named defendants as if they were a single corporate body able to own property and possess substantial assets, the judgment then turned to the question of whether that body could be vicariously liable for the acts alleged in this case. The judgment observed that vicarious liability was a longstanding and vitally important part of the common law. In the majority of modern cases the defendant is not an individual but a corporate entity and vicarious liability was likely to be the basis on which the defendant was sued. He continued:
“The policy objective underlying vicarious liability is to ensure, insofar as it is fair, just and reasonable, that liability for tortious wrong is borne by a defendant with the means to compensate the victim. Such defendants can usually be expected to insure against the risk of such liability, so that this risk is more widely spread. It is for the court to identify the policy reasons why it is fair, just and reasonable to impose vicarious liability and to lay down the criteria that must be shown to be satisfied in order to establish vicarious liability.”(Para. 34)
32 Coming to the conclusion in relation to the CCWS case, Lord Phillips adopted much of the analysis in E v. English Province of Our Lady of Charity, albeit that case concerned the liability of a bishop for a diocesan priest. The “crucial features” identified were:
“that the priest was appointed in order to do the work of the church with the full authority to fulfil that role, being provided with the premises, the pulpit and the clerical robes. He was directed into the community and given free rein to act as representative of the church. He had been trained and ordained for that purpose and his position of trust gave him great power.” (Para. 48)
33 Lord Phillips considered that the case for finding vicarious liability was much stronger in the CCWS case than it was in E v. English Province of Our Lady of Charity. The features which were relevant in this regard were: (i) the Institute was subdivided into a hierarchical structure and conducted its activities as if it were a corporate body; (ii) the teaching activity of the brothers was undertaken because the Provincial directed the brothers to undertake it; (iii) the teaching activity undertaken by the brothers was in furtherance of the objective, or mission, of the Institute; and (iv) the manner in which the brother teachers were obliged to conduct themselves as teachers was dictated by the Institute’s rules. Lord Phillips also suggested a simpler analysis at paragraph 61:
“Provided that a brother was acting for the common purpose of the brothers as an unincorporated association, the relationship between them would be sufficient to satisfy stage 1, just as in the case of the action of a member of a partnership. Had one of the brothers injured a pedestrian when negligently driving a vehicle owned by the Institute in order to collect groceries for the community few would question that the Institute was vicariously liable for his tort.”

The High Court Judgment
34 The High Court judgment expressly adopted the analysis in the CCWS case and in the passage at paragraph 69 of the judgment already quoted, treated the Marist Order as if it were a corporate body of which the first named defendant could be regarded as the representative. Indeed, the appellant submitted that the extent to which the High Court was forced to rely upon the judgment extended to utilising the judgment to supply some of the manifest inadequacies of the evidence in this case. In particular there was, it was argued, no evidence whatsoever as to the day to day running of the school and in particular the interaction, if any, between the Marist Order and the manager, and therefore no evidence to support the conclusion that the Marist Order was in control of the school or the teaching activity of its members in the school.
35 I agree that the evidence here directed to this issue was fragmentary and was not focussed on the important issue which now looms large in this appeal. I also agree that there was not any sufficient evidence for the conclusion that the Provincial of the Marist Order was in control of the teaching activities of the second named defendant. It would indeed be unsurprising if there was not a certain fluidity in the performance and allocation of roles in this regard in early 1970’s Ireland. However, I do not consider the Court can make findings as to the position in a particular school in a three year period between 1969 and 1972 without evidence directed to the issue. There is no doubt therefore that the plaintiff’s case would have been considerably stronger if he had shown that there was shared control, or even, which is not implausible, that at certain times the school was effectively run by the Marist Order. However it does not follow from this that the Court cannot make determinations on the precise legal issue which arises here. That question is the relationship between the wrongdoer and the person or body alleged to be vicariously liable for the wrongdoing.

36 Looked at in this way, it should be apparent that this is in fact not the most difficult issue in the case. There is evidence that Brother Cosgrove was a member of the Marist Order. It is accepted that the Order was a teaching order, and supplied teachers to the school. That was how Brother Cosgrove came to be in the school. Teaching was not simply an occupation, but an important and central part of the mission of the Order. The Order was established, and its members bound, not merely by rules, but solemn vows taken by them and considered sacred and binding. Those vows included chastity, obedience, poverty and celibacy. I think we are entitled to take cognisance of the fact that members of religious orders at that time normally wore habits of standard design, identifying them as members of orders, and indeed correspondingly reducing their individuality, while emphasising their part in a collective.

37 At a crude level the question of whether a relationship between D1 and D2 in any particular case is sufficient to give rise to vicarious liability can be addressed by asking how closely the relationship approximates to the classic case of employer/employee. Some of the cases have taken this approach. There is however in my view something slightly absurd in seeking to draw comparisons between the case of religious orders and businesses. Furthermore, the tests and language applicable when considering the case of employment and analogous relationships, such as “enterprise” and “risk” are not easily applicable in the case of religious orders. Indeed, to apply tests drawn from the relatively modern world of commerce and industry to religious organisations which have existed for centuries is in my view, to miss the sheer scale and impact of religious institutions on peoples’ daily lives, particularly in the Ireland of the first three-quarters of the 20th century. The relationship between members of an order and his or her fellow members and indeed the order itself was much more intense, constant and all pervasive than the relationship between an employer and an employee, or in the old language of the late Victorian cases, a master and his servant. Everything in the organisation of religious orders is directed towards emphasising the collective. The vow of obedience involves subjugation of individual will to that of the superior. The vow of poverty has the effect of making the member dependent upon the order’s collective resources. The vow of celibacy emphasises the focus of the member on relationships with the order and with God. The objective of teaching young people is not merely incidental to the work of an order, it is indeed the manner in which the order seeks to achieve its object. For a member of the order, teaching was not merely a job it was a religious vocation. There can no doubt that Brother Cosgrove was in the classroom in Sligo between 1969 and 1972 because he was a member of the Marist Order. That was known, understood and accepted by pupils and parents, and when such individuals looked at the various brothers who staffed the school at any given time, they saw, and were intended to see not just a teacher, but a Marist.

38 The relationship between members and the order, and the importance to the order of the role of members as teachers of young people, are matters which have no direct comparators in the secular world. Accordingly, I do not consider that there is anything inappropriate in addressing this question from the perspective of justice and fairness. This is not to reintroduce the unbridled discretion in individual cases so sharply criticised by Hardiman J. in O’Keeffe v. Hickey. Instead, a general question is raised in this case as to whether all persons similarly situated should be liable if certain facts are found. It would be surprising if fairness was not a component of that decision. It is perhaps conceivable that an onlooker might consider it not unfair that the only person liable for sexual abuse should be the perpetrator, and that these actions are so wrong, and outside contemplated activity, that they are the responsibility of the wrongdoer alone and no other body can be made liable for them without culpability on their own part, such as failing to act on complaints. This was the thrust of the judgment of Hardiman J in O’Keeffe. However that position is no longer possible and it is now clear that there can be vicarious liability without fault for acts of sexual abuse. If so the onlooker would surely struggle to understand that the only person or body who as a practical matter may be required to compensate a plaintiff abused in this way by a member of the Marist Order, in a school staffed by the Order, should be the local parish priest. Accordingly I conclude that in principle, once it is accepted there can be vicarious liability of acts of abuse a religious order (or its members) may be vicariously liable for acts of abuse which are sufficiently closely connected to the object and mission of the order.

39 I reach this conclusion adopting what I consider to be the cautious and incremental approach outlined by Fennelly J. in O’Keeffe, conscious indeed of the strength of the criticism of that approach contained in the judgment of Hardiman J. in the same case. The decision that in principle a religious institution can be vicariously liable for the actions of a member of the order (and in particular sexual abuse) is undoubtedly novel. But once it is accepted that vicarious liability can extend to organisations and relationships other than that between employer and employee, then the size, impact and organisation of a religious order mean that it is not a large step to extend vicarious liability to such an order. Indeed, although the common law insisted upon viewing religions and religious orders (other than established churches) as nothing more than unincorporated associations, the degree to which a member of a religious order is subsumed into a collective entity is almost unique in society and involves a far closer connection with the other members than exists between the most enthusiastic member and a club or between the most loyal employee and an employer. As Charleton J observes in his judgment, “the moral nature of the submission to religious vows, the duty of obedience, the unquestioning move from one teaching position to another and the strict nature of the obligation assumed within a religious order to accept direction show more than the employment relationship ever demands”. I do not therefore regard this development as an indicator of the law’s willingness to expand vicarious liability for such acts more generally. In particular the mere fact of voluntary association may not create the type of intense relationship that justifies imposing vicarious liability in the case of a religious order. Any such case would require a close analysis of the facts and the law.

40 It is I think revealing that responsibility in the shape of the intentional torts, or fault, in the case of the more common, if sometimes hyper-exacting modern law of negligence, remain such an important part of the tort law system, which remains by far the most important mechanism for compensation for injury. Despite the theoretical arguments which have been advanced for over half a century for a general system of compensation without fault and burden spreading, whether by an insurance or State supported scheme, there has been a stubborn but persistent adherence to culpability or responsibility as an underlying justification for liability in tort. There is no perfect correlation between wrongdoing and injury, and persons may be guilty of serious wrongdoing which cause little injury, whereas persons committing trivial acts of carelessness can be held responsible for great damage; nevertheless the process of seeking and paying compensations seems to function on the basis that at some level it can be said that there is some culpability whether intentional or negligent on the part of the defendant, which justifies the imposition of the burden of compensation. This is of course an insight which is not limited to the common law world. However, the law also permits in certain circumstances liability without wrongdoing, intentional or careless. The common law developed by individual incremental decisions which are then tested by time, and if found satisfactory, and not altered by legislation, establish the law. In those cases of liability without fault which the law of tort permits, perhaps most obviously, the ancient rule in Rylands v. Fletcher, the law of agency, and vicarious liability in the context of employment, there are I would suggest, some reasons which justify the imposition of such liability, and which have been found sufficient at least at the practical level of not leading to a reversal of the law, whether by statute or through case law.

41 In most such cases of imposition of liability without individual culpability, to some extent at least it can be said that the defendant creates, or permits and often benefits from, a situation which carries with it the risk of injury or the wrongdoing by others. In the case of the employer/employee, the employee is in a position to commit the tort because he is employed and provided with equipment which he or she may misuse. The employer chooses the general activity and it is of value to him or her. To that extent it is perhaps not unfair that an employer should bear the risk of wrongdoing, even wrongdoing which he or she may forbid and indeed genuinely abhor. This is, I would add, irrespective of whether the employment is for profit or can be labelled an enterprise. In the context of this case, it is of course possible that in another life the second named defendant might still have been a national school teacher, but it is surely beyond argument that a large part of the reason why he was in an overcrowded national school room with young boys between 1969 and 1972 was because he was a member of the Marist Order, and that he and the Order considered that he was pursuing an important and central objective of the Order in teaching such children rather than merely providing a service to the manager of the school. The fact that here the abuse occurred in the very school room is important, and in my view a decisive feature in this case.

42 However, I would not, and with respect, adopt some of the rather freewheeling analysis advanced by the plaintiff, and adopted by the High Court, on the basis of aspects of the decision in CCWS. Vicarious liability is not on the move, at least not of its own volition. If it moves, it is by the decision of judges which must be reasoned and justified. The law of vicarious liability was relatively stable, narrow and well understood for most of the 20th century until recently, and much if not all of the development of the law has occurred because of the necessity of addressing the phenomenon of historic sexual abuse of children in an institutional context. There is in my view no discernible movement in the common law world to expand vicarious liability, and therefore liability without fault, on the basis merely of an ability to pay alone, and any such development would raise fundamental issues. Instead, there has been a number of carefully analysed, but not always consistent, attempts in the courts of the highest level in the common world, to provide a framework in which to address claims of historic sexual abuse.

43 I also doubt with respect, that the function of vicarious liability is to ensure that liability for a tortious wrong is borne by a defendant with means to compensate the victim. This can I think be said more accurately to be the function, or at least the aspiration, of the plaintiff’s lawyer. The function of tort law, and vicarious liability which is a part of it, is I think to identify a defendant who can justly be called upon to compensate an injured party. There remains in the real world however an unavoidable risk that the party or parties deemed liable by the law may not be able to meet an award, particularly when the award is sizeable and the wrongdoing occurred a considerable time ago by persons who may be deceased, or in institutions which may no longer exist, or for matters in respect of which insurance was not available, or if insurance was obtained, it may no longer be in place. If this results in victims not receiving compensation which is considered desirable, then that may be a matter for public policy more generally, but it may be beyond the reach of inter-party litigation and any possible development of the common law. These are problems that can arise in any claim, but are more likely to be encountered in cases that relate to events which occurred a long time ago.

44 While the issue was raised primarily in the context of the legal nature of a religious order, an issue which must be addressed later in this judgment, I do not think it is helpful to address any part of these issues on the ruthlessly pragmatic basis that what matters is access to funds held by a trust or to an insurance policy. Firstly, it remains the case in Ireland in my view, that it is not permissible to seek either to join an insurance company to a personal injuries action, or to address the question of the presence or absence of insurance in such proceedings. Strictly speaking the existence of insurance is irrelevant to the legal issues to be determined whatever its practical significance. The law is meant to apply equally to the rich, the poor, the insured and the uninsured, and questions of liability must be determined on that basis. Indeed, this is an important discipline when issues come to be addressed in the context of cases in which individual plaintiffs may have suffered serious and life changing injuries. More importantly, while it is important at the level of policy and legal history to acknowledge the interaction of insurance and liability, that insight is of little assistance here. Indeed, it is to reverse the natural order in which the issue should be addressed. A person is normally obliged to, or at least wise to, insure against a liability which he or she may have: if there is no liability, then there is no requirement to obtain insurance and indeed conceivably such insurance may not be available. The question of liability of an individual cannot therefore be determined by the existence of insurance against that risk.

45 At a more practical level, there is no necessary guarantee that any insurance policy does exist which could be interpreted at this remove, to provide cover for claims in respect of conduct which occurred 40 years ago. Given the antiquity of these claims, it is entirely possible that there are no existing insurance policies. The policies have been lost or lapsed, or the entity providing the insurance no longer exists, or if it still exists that its reinsurance has been lost either partially or wholly. Even if a policy existed which, fortuitously could be argued to provide cover for members of a religious order in a school, it is unlikely that it would have been entered into, or, a premium set, in contemplation of the risk of sexual abuse, or the possibility that it could be perpetrated by members of a religious order. This is particularly important given the fact that if the level of damages awarded in this case were replicated generally, then the cost would be very substantial indeed to any organisation. The resulting cost would not be spread over those few policies which might still exist, and which could be said to cover abuse which occurred nearly 50 years ago. Instead the cost will be borne by the insurance company and sought to be recouped by increased premiums from future policy holders, not responsible for the abuse and perhaps not religious orders. It is not clear why that is any fairer as an outcome. Different difficulties arise in the case of trusts. Normally, the fact that an individual or property is a beneficiary of a trust would mean that the trust property is not available to meet any award made against the individual. There is nothing to suggest that there is any trust here or in any such similar case, or indeed any similar funds to provide ready compensation for the plaintiff, and therefore assuage concerns as to the extension of liability in the case. Reference to insurance and trusts therefore only distracts focus on what are undeniable difficult issues.

46 Finally, and at the level of detail, I doubt that it can be said as a general proposition that an unincorporated association is vicariously liable separately from its members, for the tortious acts for one or more of its members. As pointed out in the comment in Morgan, ‘Vicarious Liability on the Move’, (2013) 129 L.Q.R. 139, the three UK cases cited: Heaton’s Transport (St Helen’s) Ltd v. TGWU [1973] A.C. 15; Thomas v. The National Union of Mineworkers (South Wales Area) [1986] Ch. 20, 66-7 and Dubai Aluminium Co. Ltd. v. Salaam [2003] 2 AC 366, do not establish that proposition. Both Heaton’s and Thomas involved trade unions and Salaam involved a partnership. In each case therefore there were statutory interventions which had the effect of permitting the union or the partnership to sue or be sued. These cases therefore offer little guidance as to the vicarious liability of wholly unincorporated associations whose structure and legal status is not in any way provided for by statute. The High Court judgment here followed the approach in CCWS in treating a religious order as if it were a body corporate, and then analysing the two stages of vicarious liability. I have approached the issue of vicarious liability on the same basis since it reduces the possible complications in the analysis of what are in any event difficult issues. However, in my view the most difficult issue in this case is whether the assumption, and indeed the conclusion in the High Court, that the Marist Order could be treated as if it were a body corporate and therefore a single entity vicariously liable for the acts of its members, and therefore permitting execution against what are deemed to be the assets of the body (and avoiding perhaps execution against any individual assets of members if such is possible) is indeed correct. There is a further related procedural matter as to whether even if the Order may be treated as if it were a body corporate, such a body has been properly sued in these proceedings.
The legal status of the Marist Order and its relationship to the first defendant
47 The High Court here held that it was appropriate to treat the Marist Order as a corporate body liable for the acts of its members and, implicitly that the first named defendant could be treated as a representative of the Order so that judgment could be, and was, entered against him. In coming to that conclusion, the High Court judge expressly followed the approach in CCWS. However although that was indeed the outcome of CCWS, the matter was not the subject of any extended argument, or consideration, apparently because the issue was not itself seriously contested by counsel on behalf of those defendants sued on the basis of their involvement in the De La Salle Order. (See paragraph 31 of the CCWS judgment already quoted at paragraph 30 above). The issue of the problematic nature of the De la Salle Order, at least as a matter of law, was however considered by Lord Phillips and his conclusion set out at paragraph 33:

“Because of the manner in which the Institute carried on its affairs it is appropriate to approach this case as if the Institute were a corporate body existing to perform the function of providing a Christian education to boys, able to own property and, in fact, possessing substantial assets.” (emphasis added)
48 The starting point for analysis must be that the common law considers a religious order such as the De La Salle Order in CCWS, or the Marist Order here, as an unincorporated association. This approach stems in turn from the historic unwillingness of the common law to recognise the Catholic Church in particular (and presumably other religions other than the Established Church) as a legal entity in its own right, notwithstanding its obvious size, organisation and importance in the daily life of the community. If indeed the common law had recognised the Church and religious orders as possessing legal personality distinct from its members, then this and other cases would be much easier. However that step was not taken either in the United Kingdom or even in Ireland post-Independence. The limited extent to which religion and in particular the Catholic religion was recognised in Article 44 of the 1937 Constitution did not, in my view, have any effect on the legal status of those religions, and that provision was in any event removed in 1973. Of course, it may be that there was no pressure or requirement for the law to address the status of churches and orders because it was possible for the Church to organise its affairs in civil law so far as was necessary, and to give effect to its objects. Accordingly, it was possible to hold property through trustees, to make contracts through nominees who would be liable, and then indemnified, and so far as the interests of the order required protection in court, it was possible for trustees or nominees to bring proceedings. None of this however addressed the question of the Catholic Church or a religious order, as a defendant in proceedings. It seems likely that this was dealt with on an ad hoc basis, and without any issue being taken either because of the availability of property to satisfy any award, or the existence of insurance policies. However, the potential range and number of claims brought in respect of historic sexual abuse raise the prospect of very extensive potential liabilities which in other countries have led to the bankruptcy of parishes, dioceses or institutions, and may threaten their capacity to continue to undertake valuable work in the community with marginalised and vulnerable people, which, it should be recognised, is work that was carried out by members of religious orders – themselves not merely blameless for the particular wrongdoing but who are admirable for their selfless devotion to charitable works. It is perhaps not entirely surprising therefore that the difficult issue of the liability of an order or its members is maintained in these proceedings. In any event it must be addressed.
49 I cannot accept that by some process of unexplained alchemy a group of individuals such as that involved in this case, which is in law, an unincorporated association, can come to be treated for the purposes of these proceedings only, as if it were a corporate entity. References to insurance, or the existence of property held on trusts, or the reality of proceedings, cannot in my view provide an acceptable legal route between these two points. The UK cases referred to as establishing the proposition that an unincorporated association can be vicariously liable for the acts of its members reveal themselves on examination to be cases about trade unions and partnerships – both of which have statutory provisions and recognition, the effect of which is to give them some status for the purposes of legal proceedings.

50 The law relating to such bodies casts some light on the liability of unincorporated associations more generally. It has been held that a registered trade union was a quasi or near corporation. In R (IUDWC) v. Rathmines UDC [1928] I.R. 260, Kennedy CJ said at p.300:

“A trade union which has been registered with a name, an address, a constitution and rules, is a legal person, at least analogous to a statutory corporation, having an existence apart from the individuals aggregated in the combination.”
This conclusion (which only relates to registered unions) followed not from the status of a union as an unincorporated association, but from the consequences of registration in accordance with the then statutory provisions recognising the existence of trade unions. In the case therefore of trade unions and partnerships, their capacity to sue or be sued in their name results from statutory intervention and not from a status as an unincorporated association. Indeed, the case of an unregistered trade union provides the more appropriate analogy. The difficulty which may, arise in relation to proceedings by and against such bodies is thoroughly and helpfully discussed in Kerr and White, Irish Trade Union Law, (Abingdon: Professional Books Ltd., 1985) pp. 62-63. The authors conclude:
“The legal position of the unregistered trade union is comparatively straight forward – it is an unincorporated voluntary association of individuals similar in legal nature to a social club. The union has no legal personality itself and consequently any action concerning the union, its property or activities must be brought or defended by way of representative action.”
51 The difficulties of cases in which it is sought to make a defendant representative of others are also discussed by the authors. The conclusion is, that in the absence of statutory intervention, an unincorporated association lacks separate personality and cannot sue or be sued as if it were. This position is reflected in the recent decision of this Court in Sandymount and Merrion Residents Association (SAMRA) v. An Bord Pleanála and Ors. [2013] 2 I.R. 578. There this Court in a judgment of Clarke J. held unanimously that the effect of s.50A(3)(b)(ii) of the Planning and Development Act 2000, was to provide an exception to the general rule that an unincorporated association could not bring proceedings. In the course of that judgment he said:
“It is true of course, that … an unincorporated association or body does not have the legal capacity to bring or defend court proceedings. Such an unincorporated body or association is simply the sum of its individual members with no independent legal personality. However, it is also clear there can be, whether by legislation or otherwise, exceptions to that general rule.”
52 There is clearly no legislative exception relied on in this case to alter the longstanding position of the common law that a religious order is an unincorporated association. It is perhaps not entirely inconceivable that it is within the powers of the court, and the common law, to provide for an exception to that rule in some cases. However, the basis upon which such a step could be taken, was not addressed in argument, or discussed in the CCWS case. As it stands therefore in my view, the Marist Order is an unincorporated association and must be viewed by the law as such. It is essential to the very nature of an unincorporated association that it is not a body corporate. It cannot therefore be treated as if it was that which by very definition it is not. In my view, the Court must address the difficult question of the liability of members of an unincorporated association, and, the related question on the assumption that there is such liability, the question whether it has been properly invoked in this case.
Liability of an Unincorporated Association
53 To speak of an unincorporated association implies a body of some substance. Given the importance of clubs sporting and otherwise in Ireland, it would be wrong to underestimate the social significance of such a body. George Orwell observed that the English are a nation of joiners, but the observation could be applied with equal merit in Ireland, although the list of activities might not put the same emphasis on the flower arranging, pigeon fancying and dart playing praised by Orwell. However, in law, the absence of incorporation means that the body is created by the agreement of its members embodied in rules which are in the nature of a contract between the members. Thus, in Conservative and Unionists Central Authority v. Burrell [1982] 1 WLR 522, Lawton L.J. defined an unincorporated association as “two or more persons bound together for one or more common purposes, not being business purposes, by mutual undertakings, each having mutual duties and obligations, in an organisation which has rules which identify in whom control of it and its funds rests and upon what terms, and which can be joined or left at will”. There is a dearth of authority in the common law world as to the liability of members of an unincorporated association but there is a working assumption that members are jointly and severally liable for damages arising out of a tort committed by a member in pursuit of the objects of the association. The celebrated case of Miller v. Jackson [1977] 3 All ER 338, featuring Lord Denning’s dissent from the proposition that a cricket club could be liable for balls hit into the property of its neighbours, is normally cited as authority for that proposition, but it does not appear that the point was argued or separately addressed as the award was sufficiently modest to be paid out of the club’s funds. The Scottish Law Reform Commission’s, Discussion Paper on Unincorporated Associations (DP 140) (2008) p.11, set out its understanding of the general position:

“It would therefore appear that the members would be liable jointly and severally for the damages awarded, beyond the amount of their subscription to the club.
The point has not been the subject of decision by a UK court because in the reported cases in which associations have been sued (through their officer bearers) at common law or under the Occupiers’ Liability (Scotland) Act 1960, either the pursuer has failed to establish liability or the sum awarded has been sufficiently modest to be payable in full out of club funds. It has, however arisen in other jurisdictions. In Australia, the possibility that committee members who had been found liable in damages to a third party might seek indemnity from members was mentioned by Jacobs JA in Smith v Yarnold. At common law in the United States, members of an unincorporated not-for-profit association are liable for the tortious conduct of fellow members and agents of the association, although it has been noted that in some jurisdictions liability has been restricted to members who participated personally in a tortious act, or who expressly or impliedly assented to it.”

54 Club members have been liable in tort in cases such as Kennaway v. Thompson [1980] 3 All ER 329 where members of a motor boat racing club were held liable in nuisance, and similarly in the case of Tetley v. Chitty [1986] 1 All E.R. 663, where all members of a go-kart racing club were found liable in nuisance together with the borough council which had permitted the activity.
55 Perhaps the most thoughtful and extended consideration of this issue is to be found in the Irish case of Murphy v. Roche & Ors. (No.2) [1987] 1 I.R. 656. The case involved a member of a GAA club, who attended a dance in the club house and sustained injuries due to a fall which he alleged was caused by negligence on the part of the club. The Supreme Court directed the trial of a preliminary issue on the liability of a club to its members. In the High Court, Gannon J. held that a member could not sue a club per se essentially because it was an unincorporated association and the plaintiff member would be maintaining an action against himself or herself. This analysis it might be noted is necessarily dependent upon the proposition that the individual members of the club (including the plaintiff) are legally liable for the negligence of other members, at least in the pursuit of the common purpose of the club. Gannon J.’s analysis of the position of members of an unincorporated association against whom proceedings are sought to be brought, was clear:

“In my opinion this club is a voluntary association of persons having a common or mutual interest not for any financial or commercial gain who have expressed to themselves and to all third parties the terms of their association in their rules. The mere fact of such association does not cast on any one of them liability for actionable wrongs by any other of them. Liability may attach by reason of actions of an agent common to all and acting as such, or by reason of the actions of one of them having the authority in nature of agency of all. Agency, however, cannot be assumed by reason only of common association and it would have to be established as a fact by any person seeking to rely upon it. The agency, its nature and limitations is to be found in the rules mutually adopted by the members for the purposes of the common interest. It is my opinion that any wrongful action of one member carries vicarious liability for all members to the extent that it corresponds with the common interest; and, to the extent that it is not common to all and is at variance with the rules, the liability remains that only of the individual, subject to express agency, if any. However, if the actions of any member or servant in the furtherance of the common interest should occasion actionable damage, the body of members as principals are all equally liable vicariously to the injured party for the entire damage attributable to the harm, but with the right of recourse for indemnity against the wrongdoer. In the absence of express terms no one individual sharing the common interest served by the action of the agent, be he member or servant, can avoid his vicarious liability for the entire damage to the injured party even though contribution may be obtained under the Civil Liability Act, 1961.” (p.661)
56 It becomes important to consider here precisely what was in issue in these proceedings on the pleadings. It will be recalled that the first named defendant did not make any concession as to responsibility but insisted that the case be determined strictly in accordance with law. Much of the first named defendant’s criticism of the case made by the plaintiff consisted of detailed, and in some cases justified, criticisms of the pleadings and the lack of detailed evidence. The same principle applies however to the first named defendant. The only plea raised was that at paragraph four discussed above which did not deny that the first named defendant was Provincial of the Order but rather pleaded that the members of the Marist Order as an unincorporated association were not liable either directly or vicariously for any act of any other member. It is correct that members of the Order are, at common law at least, members of an unincorporated association and they do not have any direct liability for the acts of others. However, for the reasons set out above, I consider that they have a vicarious liability for the acts of other members. The paragraph goes on to assert, correctly in my view, that any current member of the association is not vicariously liable for acts of a member prior to the defendant becoming a member of the association. In my view, the members for the time being at the time the act is committed are liable rather than the members, for example, at the time the proceedings are commenced. It is however conceivable that the rules of the association may allocate liability internally. It may be that this further plea is meant to imply that Brother McGowan joined the Order after 1972, but if so it is not explicitly pleaded, and was not addressed in evidence. The defendant deliberately chose not to risk providing assistance to the plaintiff’s case by calling evidence, but thereby ran the risk that he might also lose evidence that might be of assistance to the defendant’s case. On day six, page 46 of the transcript, it appears Brother McGowan was going to give evidence but having after a short period for consideration, he was not called. Therefore, the plaintiff has in my view established that he was abused by the second named defendant who was a member of the Marist Order, and that he has pleaded that the first named defendant is a member of the Marist Order and indeed a provincial, and this is not denied. It has neither been pleaded nor proved by the second named defendant that he was not a member during the period of the wrongdoing established in this case. That in my view is just enough to justify judgment against the first named defendant, although it remains to be seen what benefit such judgment against the individual will be to the plaintiff. This might appear a narrow and somewhat technical approach, which nevertheless has decisive consequences in this case. After all, the first named defendant may have been able to prove that he was not a member of the Order at the relevant time. However he neither sought to plead, or prove, such a state of affairs. Instead he took up a position – that members of an unincorporated association were not vicariously liable for the any of the acts of another member – which in the event failed as a matter of law. He also insisted on strict proof of all matters and stood on his right to defeat the claim even on grounds which were on any view, technical. It may be rough justice, but it is justice all the same, if the same standard is applied to his case.
Representative Defendant
57 There was considerable discussion in the course of the appeal of the possibility of seeking an order that the first named defendant was sued in a representative capacity on behalf of all members of the Order or, conceivably specified members. While the first named defendant made effective play of the fact that the plaintiff had not sought such an order the first named defendant did not necessarily concede that such an order was possible. It subtracts somewhat from the force of the arguments made about the inadequacies of the pleadings, if on closer examination it became apparent that there was no simple or effective route to a broader based claim. Order 15 Rule 9 of the Rules of the Superior Courts, 1986 does permit a person to sue, or be sued on behalf of all persons having the same interest in the cause or matter. However, Kennedy C.J. stated bluntly in Moore v. Attorney General (No.2) [1930] I.R. 471 at p.499, that the almost identical provisions of Order XVI Rule IX of the Rules of the Supreme Court (Ir.), 1905, did not apply to an action in tort. I am not sure that that is necessarily correct in all circumstances and in particular where a claim is made for the same vicarious liability against a number of parties (something that might not have been conceived possible in 1930). In any event I think that no sufficient attempt was made here to endorse the plenary summons with a claim that the defendant was sued in a representative capacity, or to identify the persons alleged to be represented. The appropriate course in such a case is to write to the order or provincial threatening to sue all individual members of the order unless a defendant is nominated. If that course is not taken, then all members who can be identified can be joined as defendants. If however any judgment is obtained against those defendants, the judgments are individual and whether or not such judgments will be met by insurance, or from assets which may be held for the benefit of the order more generally, may depend on the terms of the insurance, and indeed the terms upon which such assets are held, and perhaps the willingness and ability, of the order to make funds available to satisfy any judgment against an individual. Whether this is a desirable position as a matter of law and whether further changes should or could be made, is a matter which might usefully be considered by those charged with law reform.
Contributory Negligence
58 The High Court judge held that the manager of the school, as the legal employer of the second named defendant was also vicariously liable for his acts while teaching. Since the manager had not been sued, and since any claim against the manager was statute barred, the Court held that the plaintiff must be identified with the manager under s.35(1)(i) of the Civil Liability Act 1961, for the purposes of contributory negligence under s.34 of the same Act. However, the trial judge considered that the evidence was that the Order was much more substantially in control of the teaching than the manager of the school, and he apportioned liability as between the Order and the manager, 85%-15% and therefore reduced the plaintiff’s award by 15%. The first named defendant has appealed against the apportionment, and the plaintiff by notice to vary, contending that the finding of contributory negligence should not have been made. It is logical to deal with this latter argument first.

59 Section 35 of the Civil Liability Act deals with what it describes as “identification”. Much of it is unremarkable. It provides for example that the plaintiff is deemed responsible for the acts of a person for whom he is vicariously liable or when suing as a personal representative of a deceased’s person, or for example when suing as an assignee. However, s.35(1)(i) is quite novel. It provides:

“(1) For the purpose of determining contributory negligence—
… …

(i) where the plaintiff’s damage was caused by concurrent wrongdoers and the plaintiff’s claim against one wrongdoer has become barred by the Statute of Limitations or any other limitation enactment, the plaintiff shall be deemed to be responsible for the acts of such wrongdoer;”
The immediately preceding section, Section 34, deals with the apportionment of liability in a case for contributory negligence. It provides so far as is relevant:
“(1) Where, in any action brought by one person in respect of a wrong committed by any other person, it is proved that the damage suffered by the plaintiff was caused partly by the negligence or want of care of the plaintiff or of one for whose acts he is responsible (in this Part called contributory negligence) and partly by the wrong of the defendant, the damages recoverable in respect of the said wrong shall be reduced by such amount as the court thinks just and equitable having regard to the degrees of fault of the plaintiff and defendant: … …” (Emphasis added)
60 Counsel for the plaintiff does not dispute that on the judge’s findings, the manager was a concurrent wrongdoer. He was vicariously liable for the assault of the second named defendant. It follows that for the purpose of s.35 that the plaintiff, who did not sue the manager, and whose claim against such manager is not statute barred, must be in the words of s.35 “deemed to be responsible for the acts of such wrongdoer”. However, counsel argues that s.35 is not an end in and of itself. It is introduced for the purposes of determining contributory negligence. He argues that contributory negligence is by virtue of s.34, limited to acts of negligence or want of care. Thus, the argument runs, the apparent breadth of s.35 is limited by the fact that it is stated to be an attribution of liability for the purposes of determining contributory negligence and therefore the only acts of the manager wrongdoer for which the plaintiff can be made responsible are acts “constituting negligence or want of care of the plaintiff or of one for whose acts he is responsible”, and not any other wrongdoing, such as assault, or as here vicarious liability for such assault.
61 It does not appear that this argument has arisen before, and it does not seem to have been the subject of any academic consideration. Certainly we were not referred to any such commentary. It is idle I think to deny that the argument has some weight at the level of language if the two sections are taken on their own. However, it is I think relevant that the Civil Liability Act is an extremely complex provision which while a significant advance in the law, is not so perfect a construction that there are not provisions in the Act which do not fit comfortably together. To understand these novel and complex provisions, it also necessary to understand the general structure of the Act and the function of these sections. In particular, as McMahon and Binchy, Irish Law of Torts, 4th Ed., (Dublin: Bloomsbury, 2013), p.840 at para. 20.67 points out, the provisions of s.35 “harmonise with the provisions relating to contribution, to ensure fair treatment, not only between plaintiffs and defendants, but among the defendants themselves”. It is necessary therefore to address the sections in that wider context.

62 It is in my view certainly open to argument that s.35(1)(i) operates too harshly. The underlying theory however is clear, and in principle at least, sensible. One of the main provisions of the 1961 Act was to allow the allocation of liability (and consequently damages) between defendants and indeed other concurrent wrongdoers responsible for the damage suffered by the plaintiff. If a plaintiff did not sue one such wrongdoer (with the consequence then that such wrongdoer may not be available for a claim of contribution by other concurrent wrongdoers who have been sued), then the Act through s.35 requires that the plaintiff must bear that loss.

63 It is significant that it is accepted that the definition of concurrent wrongdoers includes anyone responsible for the same damage to the plaintiff and specifically includes circumstances where the wrong on the part of one or both potential concurrent wrongdoers under s.11(2)(b) “may be a tort, breach of contract or breach of trust, or any combination of them”. If there was no provision for the identification of the plaintiff with the liability of a concurrent wrongdoer not sued by him or her, then the plaintiff might have less incentive to sue all potential concurrent wrongdoers, and might be able to throw all the loss upon one defendant. Once it is accepted however that intentional tortfeasors, contract breakers and trust breachers are also concurrent wrongdoers from whom contribution might be sought, it would make little sense to read the identification provisions of s.35 as only having a practical effect in relation to those acts of a concurrent wrongdoer which constitute negligence or want of care. This is particularly so since the want of care might not be such as would give rise to a cause of action whereas the intentional tort or breach of contract certainly would. Indeed it is difficult to see how a party, who is guilty of want of care which does not amount to a cause of action, can be said to be a concurrent wrongdoer.

64 The potential outcome of the defendant’s argument in this regard is more than peculiar. The combined effect of s.34 and s.35 would be is that certain acts (want of care) which would be contributory negligence if committed by the plaintiff, cannot be treated as contributory negligence through the vehicle of s.35 (since they would not necessarily amount to concurrent wrongdoing). On the other hand, while the plaintiff must be identified under s.35 with the acts of the concurrent wrongdoer not sued for the purposes of contributory negligence, certain of those acts (torts other than negligence, breaches of contract, breaches of trust), would nevertheless not constitute contributory negligence, even though, if the same concurrent wrongdoer is sued in the proceedings by the plaintiff, or joined as a third party, contribution in respect of those acts of concurrent wrongdoing would be available to the other defendants. There would be have symmetry or harmony between the provisions of s.35(1)(i) and the contribution provisions if that was the case. One might wonder then as to the purpose to be served by identifying the plaintiff with the acts of the concurrent wrongdoer who was not sued. If s.35 merely means that the plaintiff will be fixed with the acts of a concurrent wrongdoer which amount to negligence, it would have been simpler to have stated so explicitly rather that use the more general (and on this argument, misleading) words of s.35.

65 It seems to me that this section can be understood more readily and more naturally as merely a deeming provision which deems the liability of the statute barred defendant a form of contributory negligence which can then be pleaded against the plaintiff in reduction of the plaintiff’s award. The purpose of a deeming provision is to give a meaning to something for a particular purpose which it would not otherwise have more generally. Breach of contract or an intentional tort is not normally contributory negligence if committed by the plaintiff, but when committed by a concurrent wrongdoer not sued and now protected by the Statute of Limitations, it is deemed to be so for the limited purposes of the identification provisions of the Civil Liability Act.

66 Even read in this way the section has the capacity to operate harshly in a number of circumstances. First, in a case such as the present, where there are a large number of defendants who may be concurrent wrongdoers on the grounds of vicarious liability but who it may be very difficult to identify, and who the plaintiff may not have the capacity to identify, it may be unfair to reduce the plaintiff’s award for failure to join all potential parties. No provision is made for the possibility of a lack of knowledge on the part of the plaintiff of the existence of a concurrent wrongdoer when proceedings are commenced, and indeed when a claim came to be statute barred. Finally, the symmetry between the provisions of s.35(1)(i) and the general provisions on contribution, while close is not perfect. The limitation period for the initial claim by the plaintiff against the wrongdoers, is not identical to the limitation period for a claim for contribution. Thus the fact that a plaintiff’s claim against a concurrent wrongdoer has become barred does not necessarily preclude a claim for contribution by any other concurrent wrongdoer who has been sued. In such circumstances, which may of course be unusual, a defendant may have the option of either relying on the provisions of s.35(1)(i) or joining the concurrent wrongdoer as a third party. A related difficulty arises because s.35(1)(i) is triggered merely by the failure to sue a party against whom a claim is statute barred and may take no account of the capacity of such a party to meet an award of damages. In such a case although the plaintiff might not have recovered damages against that concurrent wrongdoer, the failure to sue the wrongdoer may result in a reduction of the plaintiff’s award. It may be that these difficulties do not arise, or that there are other and further difficulties. The matter was not argued before us in any detail and arises because it has been necessary to consider the underlying rationale of s.35(1)(i). I raise these matters in order to suggest that the section might benefit from further detailed scrutiny. For the purpose of this case however, I am satisfied that the High Court was correct in identifying the plaintiff with the wrongdoing of the manager who was not sued. I would accordingly dismiss the notice to vary.

67 There is however considerable force in the plaintiff’s contention that once it was determined that the manger was a concurrent wrongdoer and also vicariously liable for the acts of the second named defendant, there was no basis either in theory or in fact for apportioning responsibility 85%-15%. Since vicarious liability is liability without fault, it is difficult to see that there could be different “degrees of fault” as contemplated by s.34. Accordingly s.34(1)(a) applies and liability is apportioned equally. In any event, even if it were possible to apportion responsibility between two entities having vicarious liability, it was not possible in this case because there was an evidential deficit as to the relationship between the manager on the one hand and the Marist Order on the other. I do not think it is necessary to determine whether in any such case it may ever be possible to identify “degrees of fault” so as to apportion liability between two defendants both vicariously liable for the acts of a third: in this case the manager was the employer who had the primary liability for the acts of the employee. The relationship between the Order and its member may be such as to give rise to vicarious liability, but it would be wrong to hold that it can almost entirely displace the legal responsibility of an employer. Accordingly, I would apportion responsibility equally between the Order and the manager. In the judgment he delivers, Charleton J. concludes that the Marist order had sufficient control over the first defendant that it (assuming for these purposes that it could be separately sued) would be wholly responsible, and its liability would exclude entirely the liability of the person or entity that was the employer of the first named defendant. For my part I doubt that the evidence in this case is of sufficient detail and strength to provide a sound foundation for such a conclusion, and I would be extremely slow to hold that the liability of an employer can be lost, avoided or transferred other than by express agreement. Furthermore I think it would be undesirable to introduce this element of uncertainty into the relationship between employer and employee.

68 It follows from the foregoing that in theory all members of the Marist Order, at least those who are members at the time of the alleged abuse, are vicariously liable, but only Brother McGowan has been sued. There was some discussion therefore as to whether s.35(1)(i) applied in this context as well. I do not necessarily accept that it would be appropriate to permit a party such as the first named defendant in this case, to rely on the failure of the plaintiff to sue other members of a religious order when knowledge as to the identity of such members was something much more clearly within the power and control of the first named defendant rather than the plaintiff. However, in any event as is apparent, this issue was not raised by the pleadings, and accordingly it is neither necessary, nor appropriate, to address the question of the potential liability of other members of the Marist Order for the purposes of s.35(1)(i).
Quantum
69 The plaintiff’s damages were assessed at €350,000 by the trial judge. The assessment of damages for personal injuries is not a precise science, and becomes particularly difficult when it involves the assessment of general damages for the psychological impact of a wrongdoing. Much more information is available about the impact of physical injuries on human beings, and the courts have considerable experience in dealing with such injuries. Furthermore, it is also possible to be more confident about what the likely position of a plaintiff would have been, had a physical injury not occurred. The plaintiff now attributes difficulties he has experienced in his life such as changed jobs and difficulty forming lasting relationships to the discovery of the abusive behaviour of the second defendant. But some difficulties in life may not be capable of being traced to any single causal event, still less one for which compensation is available. The difficulties of assessment of damage to the psyche is compounded in cases such as this which extend over a considerable period, and where for the majority of the period, the plaintiff was unaware of the abusive conduct because he had blanked it from his memory. I do not wish in any way to depreciate the significance of these matters for the plaintiff. I do consider that the process of bringing proceedings, confronting a wrongdoer and having the determination of the court are more important factors in cases such as this than for example in a car accident. Confronting an abuser and obtaining a public and authoritative determination that the defendant is responsible for the abuse, is an important vindication of a plaintiff. While this is a distressing case, it must also be acknowledged that there have been even more severe and traumatising cases of abuse. There is regrettably a spectrum of cases with which the courts are now familiar, and any case must be located on that spectrum. This case while significant and serious, is not at the most extreme end of the scale.

70 There must also be some correlation between the figures awarded for injuries of this nature and general damages awarded for catastrophic personal injuries resulting in some cases in a quadriplegic life from a very young age, or severe brain damage. While very large awards are made in these cases, the bulk of the award relates to special damages in respect of past and future care. The component for general damages for pain and suffering rarely exceeds the amount awarded in general damages in this case. Awards for residential abuse may be a useful point of comparison. There was I think only limited evidence as to these matters which might benefit from greater scrutiny in another case. In the circumstances of this case however, I would reduce the overall general damages to a figure of €150,000. When the deemed contributory negligence under s.34 is taken into account, this would result in an award of €75,000.

71 I have had the opportunity of reading in draft form the judgment delivered today by Charleton J. and have greatly benefitted from its range, detail, and depth of thought. There is as he observes a large measure of agreement between us. This is a very difficult case. Charleton J. cannot agree that the finding of the High Court as to liability against Brother McGowan should be upheld on the narrow basis on which my decision rests. He would however remit the case to the High Court to consider if liability could be established against Brother McGowan, not individually as a member of an unincorporated association, but rather in his capacity as Provincial and on the basis that such an office is a corporation sole. I recognise the learning which he has brought to bear on this issue. I agree that the entire question of the potential liability of a religious institution, or order, first at common law, and then after the coming into force of the Constitution is something which deserves study and argument. If correct it might provide a basis for the liability of the Order through its Provincial, which the cases, in different ways, consider appropriate. However I cannot see that it is a possible route in this case which was commenced 15 years ago and concerns events more than 25 years earlier. If it was clear that additional legal argument would be decisive then there might be some argument for permitting that argument to be made, even at this stage. However the question of potential liability as a corporation sole is one not canvassed before, and is by no means clear cut. It was discounted by Geoghegan J in O’Keeffe. It would be necessary to amend the pleadings, seek discovery, call evidence and then engage in an entirely new argument. That would not be the resolution of this case, but in truth the commencement and determination of another. Accordingly I regret I cannot agree to the course he suggests.

Judgment of Mr Justice Charleton delivered on Thursday the 9th of February 2016

1. At issue on this appeal is vicarious liability for the sexual abuse of a pupil by a teacher. An important aspect of the case is also whether the present leader of an unincorporated religious group, specialising in teaching, may be vicariously responsible when one of their number sexually abused a child in a school 40 years ago, a time when he may not have even entered that way of life. While this case concerns an unincorporated religious order, many other groups of people who pursue similar aims and interests, such as sporting associations, also organise themselves without incorporation. Hence, the problems of liability and succession to liability are not specific to religious orders. Religious orders are merely one class of organisation lacking legal personality. Such groups must be considered within a broader analysis of vicarious liability. That aspect of the appeal also brings into focus succession to liability through a corporation sole, as mentioned in the judgment of Geoghegan J in O’Keeffe v Hickey [2009] 2 IR 309.

2. Brother Patrick McGowan, the first defendant, and the appellant herein, is the only appellant from the judgment of Ó Néill J in the High Court of 24 January 2014, [2014] IEHC 19. In his judgment, Ó Néill J awarded at full value the sum of €350,000 to Pádraig Hickey, the plaintiff, as damages in respect of sexual abuse suffered by him between 1969 and 1972 at Saint John’s, a Catholic national school in Sligo. These damages were reduced by 10% because of the defendants not proceeded against, as listed in the title. At that time the school was staffed by the Marist Brothers, a religious order devoted to teaching. Brother McGowan never abused Pádraig Hickey. The trial judge determined that the abuse was committed by Christopher Cosgrove, who was a Marist Brother when he abused Pádraig Hickey but who has since left the Brotherhood. That second defendant, ex-Brother Cosgrove has not appealed. The action against the State defendants was never proceeded with. It might also be noted that counsel arguing the appeal on behalf of the plaintiff/respondent differed from counsel in the High Court.

Facts
3. This national school was run according to pattern familiar in Ireland of having a board of management, headed by a school manager who was not involved in the day to day management of the school. He was a cleric who was appointed to that position by the patron of the school, who was the bishop of the diocese in which the school was situated. The bishop was not joined in these proceedings and neither was the school manager, who, as will be seen, was the administrator, or effectively parish priest, of the diocesan cathedral. Brother McGowan, it appears, is now the principle of the Marist Brothers in Ireland. The Marist Brothers are an unincorporated group of men who take religious vows of celibacy, obedience and poverty in order to devote themselves to teaching. The vows are for life. The case was never made that ex-Brother Cosgrove was known, or reasonably suspected, to be a danger to children. There was no evidence to that effect. No fault was alleged against the Marist Brother then in charge of the school for allowing ex-Brother Cosgrove to teach, and thus have access to children. The fault proven in this case is that of ex-Brother Cosgrove. He, as the trial judge found, sexually abused Pádraig Hickey. The liability is vicarious. At paragraph 4 of his judgment, Ó Néill J described what he had been subjected to as a child. An edited quote suffices to indicate the terrible nature of the abuse of authority which polluted the plaintiff’s childhood:

The plaintiff … described becoming involved with the school band… [Ex-Brother Cosgrove] was in charge … [H]e began the practice of holding the plaintiff in a close manner [whilst teaching him to play the drums] and of bringing his face into very close proximity with the plaintiff’s face. This type of activity, the plaintiff said, then continued in the normal classroom. [Pádraig Hickey] would frequently be instructed … to come to the top of the class … either under the pretext of reading to the class or of being assisted in learning. … [Ex-Brother Cosgrove] began rubbing his legs and this evolved into fondling his anus and genitalia, initially outside his clothes, but then inside his clothes and at times inserting a finger into the plaintiff’s anus. … The plaintiff described these activities as occurring several times during every week and that they were a cause of the gravest upset to the plaintiff and that he was powerless, in the context of the position of authority of the second named defendant and his close relationship with the plaintiff’s family, to do anything about it and that he lacked the language to express his distress and unhappiness.
4. On the evidence, the wrong for this was entirely that of ex-Brother Cosgrove. Nothing flagged whatever perversion drove him on. There was no indication to either the Marist Brothers or to anyone else teaching in or running that school that he had a sexual attraction to small boys. Had there been any indication, a case of negligence might have been built against another party; that of failing to prevent foreseeable harm. Vicarious liability, however, ascribes liability without fault. A primary tortfeasor is responsible for the wrong, and thus must be at fault, but the employer, or master to use the language of older cases, of that tortfeasor becomes liable through the relationship whereby the wrong is ascribed without fault to the person or body employing him. Brother McGowan, as the current head of the Marist Brothers in Ireland, was held by the High Court to be responsible vicariously for the wrongs of ex-Brother Cosgrove four decades previously. The fault of ex-Brother Cosgrove was ascribed without fault on the part of Brother McGowan to him solely by reason of his now having a leading role in that religious order in Ireland.
5. Before this case commenced, no representative order was sought on behalf of Pádraig Hickey against the Marist Brothers, no interrogatories were served, no discovery was sought as to the structure of the religious order or as to any manner in which responsibility was structured by that group, or property was held, and no exchange of particulars or interrogatories explored any of those issues. During the course of the case, these matters were not addressed in evidence. There was no, or minimal, focus on even the issue of who ran Saint John’s School in Sligo in the 1960s and 1970s. How authority was structured in the school was left unexplored. Ó Néill J found ex-Brother Cosgrove liable as the tortfeasor and Brother McGowan liable as his employer. Brother McGowan was, in this sense, regarded as somehow being the personification of the Marist Brothers. The explanation for how Brother McGowan came to be in the case at all came from counsel for Pádraig Hickey on the first day of the trial in November 2012 in terms that he was being sued “in his capacity as the head of the Marist brothers and in the sense they’re being sued on the basis that they are vicariously liable for the actions of [Ex-Brother Cosgrove] who was at the time a Marist brother.”

6. The appeal ranged over the multiple questions and was based on patchy testimony regarding the regrettably unexplored issues as to authority and structure within the school. It may conveniently be organised by a focus on the following questions:

(1) Was there evidence that the Marist Brothers were in control of the school or evidence from which such control might be inferred?
(2) Does control of a school by a religious order lead to the conclusion that abuse committed during the course of teaching by a brother renders the abuser’s congregation vicariously liable?

(3) Does this vicarious responsibility make the head of the congregation liable?

(4) Can the successor to the head of the congregation be liable, even after decades have passed?

(5) Do errors in the pursuit of this case on behalf of the plaintiff Pádraig Hickey require the ordering of a retrial in the High Court?

(6) Must the damages be reduced as excessive and further reduced under the Civil Liability Act 1961, as indeed the trial judge reduced same to €315,000, by reason of not pursuing a concurrent wrongdoer, the State defendants?

Proceedings on behalf of Pádraig Hickey
7. This action was commenced by the issue of a plenary summons on 6th February 2001 against the parties named as defendants herein. As Pádraig Hickey testified in the High Court, litigation had not been contemplated in the prior decades because of the complete suppression of these repellent memories into his subconscious. With the commencement of a Garda investigation into other instances of abuse at the school, he was contacted and subsequently sought psychiatric help. The trial judge in the High Court held that memory of the abuse was reliably recovered with the help of professional assistance. Letters of demand were served on, perhaps only some of, the proposed defendants on 9th of February 2001. Letters were received on various dates thereafter from all but Brother McGowan indicating on whom service should be affected. There was no evidence of service on Brother McGowan of any such letter. Further, the plenary summons was only served on the actual abuser, ex-Brother Cosgrove. Pádraig Hickey changed solicitors some years later and there is a notice of change of solicitor dated 22nd August 2008, which on the face of it claims to have been sent to all of the parties. This was ostensibly accompanied on that date by a notice of intention to proceed in similar form. Apparently, it was then noticed that the plenary summons had only been served on ex-Brother Cosgrove. An application was brought on behalf of Pádraig Hickey to renew the summons. In his supporting affidavit, dated 20th November 2008, Brother McGowan was described as “a representative of the Marist Brothers”, yet no order had been sought in that regard. The affidavit avers that “in the light of recent case-law”, he had “no cause of action against the State defendants” and that he was “not proceeding against those defendants.” The affidavit avers that the action against the State defendants was discontinued, but no notice of discontinuance was exhibited. As to service on Brother McGowan, the affidavit avers that he could find “no evidence of service”. An opportunity was thereby presented to offer evidence through a replying affidavit as to who Brother McGowan was, when he joined the order and what responsibility he held and when. That opportunity was not taken either then or at the trial. Instead, the defence of this case proceeded as if Brother McGowan was an accused in a criminal trial and was keeping an unbreakable counsel of silence.
8. By motion dated 20th April 2009, Brother McGowan sought to set aside the renewal of the plenary summons, which by this stage, 8 years after it had been issued, had been served on him. He also sought a dismissal of the proceedings against him for inordinate and inexcusable delay. He averred in his supporting affidavit that no “letter of demand was sent to or received by me on behalf of the Marist Brothers.” In a later affidavit, he also explicitly put on warning those proposing to run the case that his religious order did not run Saint John’s School:

The second issue I wish to deal with … is the suggestion that the Congregation of Marist Brothers were responsible for running the school at the time. This is not true. It is correct that a number of members of the Marist Congregation taught at the school but the Congregation never managed it. The school was at the time of the events complained of … managed by an individual school manager, who was the local priest in the parish and not a member of the Marist Congregation.
The issues just joined and specifically warned of should be noted together with the lack of any useful testimony on the issues. The order of O’Keefe J of 16th October 2009 was to dismiss that motion. The plenary summons thus stood.
9. By a defence dated 10th February 2010, Brother McGowan addressed the claim of liability through ex-Brother Cosgrove having once been a member of the Marist Brothers by denying that this could give rise to liability. He pleaded at paragraph 4:

The plaintiff discloses no cause of action as against the First named Defendant on the basis inter alia that the religious order described as the Marist Brothers is an unincorporated association, whose members are not liable in law, either directly or vicariously, for any act or default of each other. Further, and without prejudice to the foregoing, the current members of the Order are not liable directly or vicariously for any act or default of any member of the Order committed prior to their becoming members thereof.
10. It is not denied that Brother McGowan is now a member of the Marist Brothers. Nor is it denied that he was at the time of these wrongs against the plaintiff Pádraig Hickey. Nor is any pleading directed as to the organisation of the Marist Brothers and, subject to what follows, the issue of the structure of this unincorporated association is not set out as a matter of fact in this defence. The defence simply says: an unincorporated association cannot be responsible for torts committed during work on its behalf; and, even still, current members are not liable for what former members did.
Validity of High Court findings
11. On this appeal there has been a challenge on behalf of Brother McGowan to the finding implicit in the award of damages that the Marist Brothers were running St. John’s School in Sligo when Pádraig Hickey was abused. Ó Néill J held that the effective running of the school was by the Marist Brothers. This extract from his judgment is to be found in paragraphs 40-42:

St. John’s National School in Sligo, when the plaintiff was a pupil in it, was a Marist school in the sense that the Principal was a Marist Brother and the teachers in it were nearly all Marist Brothers. These Brothers were selected for their respective positions and directed to take up those positions by the predecessor of the first named defendant, the Provincial for the time being of the Marist Brothers in Ireland. The Marist Congregation was dedicated to the care of the young and in pursuit of this primary objective, the principal activity engaged in was teaching. Notwithstanding the clear identity of St. John’s School as a Marist school, it was nonetheless a national school subject to the prevailing legal regime for the governance of national schools… What this meant … was that the administrator of the parish, on behalf of the Bishop who was the patron, was the manager of the school and it was he who discharged the function of legally appointing teachers to the school, including the Principal. The school was run under the 1965 National School Rules regime, so that the curriculum pursued and the academic standard required was regulated by the Department of Education which pursued its interest in the system through the School Inspectorate system. I am satisfied on the evidence that, on a day-to-day basis, the school was run by the Marist Brothers and was under the day-to-day supervision of the Principal, who was a Marist Brother, and the manager at the time, Canon Collins, had very little, if any, hands-on involvement in the day-to-day management and running of the school, which I have no doubt the manager at the time and also, probably, the Bishop of the Diocese as patron, were more than content to leave in what they would have seen as the competent hands of the Marist Brothers … who could supply sufficient numbers of trained and experienced teachers who shared the religious ethos which the Bishop, as patron, sought to uphold.
12. On appeal, a court should take the findings of fact as decided by the trial judge once these are supported by evidence, as per McCarthy J in Hay v O’Grady [1992] 1 IR 210 at 217 if “the findings of fact made by the trial judge are supported by credible evidence … however voluminous and, apparently, weighty the testimony against them” because the “truth is not the monopoly of any majority.” There is a difference between a trial judge making an erroneous finding of fact and making a choice between competing evidence. In the latter instance it is not for an appellate court to “second guess the trial judge’s view”; Doyle v Banville [2012] IESC 25 at paragraph 2.7 per Clarke J. In this case it has been necessary to consider the entirety of the transcript to adjudicate whether there was evidence upon which a trial judge could reasonably conclude that the Marist Brothers were running the school. Pádraig Hickey testified that during his time in the school he had two teachers, the first a Brother Mel, with whom he had “no issues”, and the second Brother Cosgrove, as he then was. No other teachers are mentioned, particularly none outside the religious order. In referring to teachers, he mentions the Marist Brothers as wearing a distinctive form of religious dress. Four witnesses who had been pupils with Pádraig Hickey were called to testify to the abuse that they had seen him suffer at the hands of ex-Brother Cosgrove. They were not asked about the school, its structure or even what they observed as to who was teaching there. Canon Tom Hever testified that under the Education Act 1998, a national school is run by a board of management, of which he was the current chairman. Historically, he said that the patron was the Bishop of Elphin and his predecessors and acknowledged that up to the mid-1970s the Bishop “would nominate, if he wished, a manager to manage the school on his behalf.” His understanding was that, at that period in time, it “would have been the administrator of the cathedral.” As the Diocese of Elphin owned the property, and still does apparently, a Canon Collins was the manager at the time of the abuse and was succeeded by Father Gerry Donnelly. Nothing indicates that any of these had any awareness of what was happening at the school. Indeed, one of Pádraig Hickey’s classmates who witnessed the abuse told only his mother what he had seen. The result was that he left formal education in disgust. The school also had a headmaster. Canon Hever understood that the Marist Order would “put forward a name, but that would have to be approved by the manager.” Such a headmaster would have to meet the qualification standard of the Department of Education, as funder of national schools. The function of the headmaster would be “as they are today, to run the school on a day to day basis.” He agreed that this made the headmaster the day to day manager of the school. The cathedral administrator, he said, would have had no particular experience in education and would learn, as he had, through experience or perhaps do a course. Asked how the Marist Brothers became involved in the school, he said:
My understanding is that they’d always have to be invited in by the bishop, so they would have been invited in by the bishop of the time. I’m not too sure who that was or exactly when it was … I would think initially [the teachers] were probably all Marist, but then over a period of time they would have been lay people involved as well … over time. … The completion of any appointment [of lay people] would have been up to the manager. The principal could have recommended somebody … I think in those times I don’t know if interviews had come in … but it was always up to the manager to ratify any appointment.
13. Canon Hever agreed that the principal of the school was “always a Marist” at the time of the abuse, 1969 to 1972. Up to 1971, his evidence was that the principal was Brother Phelim and that he was replaced by the manager appointing Brother Einhard. Ex-Brother Cosgrove testified that he had entered the Marist Order at the age of 13 and had trained after secondary school as a teacher. He was “then assigned to Strokestown National School, a small school with two teachers” from where he “was assigned to St John’s school in Sligo” where he “taught the plaintiff.” His understanding that while he may have signed a standard form of contract with the Department of Education, the same as with other teachers “around the country”, he was “appointed by the provincial” of his religious order to his teaching assignments: “I was sent by the provincial when he made changes and brothers from around different places to different schools, I was sent to Sligo … the same thing.” There was no evidence called from the defendant Brother McGowan as to his career or responsibilities.
14. It would be unnecessary to resort to judicial notice – the experience which many judges have of their own education in national schools staffed by members of a religious order – to uphold the findings of the trial judge. No source of authority is mentioned in the evidence as operating within the school apart from the Marist Brothers. On no occasion is any decision by the school manager referred to. There is nothing to indicate him as being in a superior position. Witnesses operated on an underlying acceptance of fact that the Marist Brothers were in charge of the school. Canon Hever made explicit in his testimony that while the principal of the school was subject to the administrator of the local cathedral, this was not in any sense an executive role. In consequence, it is clear that the trial judge’s findings of fact in this regard were soundly based on evidence.

15. On the structure within which ex-Brother Cosgrove operated, the trial judge found that he was answerable to his religious superior. This extract is taken from paragraph 43 of his judgment:

…insofar as the control of the day-to-day activity of a teacher, such as the second named defendant, was concerned, I am quite satisfied that this would have rested exclusively within the realm of the Marist Congregation, initially between the teacher and the Principal of the school, and if issues were not resolved within that relationship, it is probable that they would have been, within the hierarchical structure of the Marist Congregation, no doubt achieving compliance to whatever was required, on the part of the teacher by recourse to his vow of obedience. Only in the extraordinary circumstance of a Marist Brother defying the authority of his superiors in the congregation, in my opinion would it have been necessary to have involved the manager of the school to resolve problems or difficulties arising in connection with the discharge by the teaching Brother of his teaching duties.
16. This finding was, again, soundly based in evidence. In addition to the above quotation in the context of the organisation of teachers within the school, the evidence of the Reverend Professor Michael Mullaney provided a foundation upon which the analysis of the trial judge of the relationship between an individual Marist brother and his superiors could be based. While, on this appeal, there was a strong focus by counsel on behalf of Brother McGowan as to whether the correct constitution of the Marist Brothers had been used by this expert witness, and while it was necessary to obtain during the testimony a copy of the earlier constitution in Latin, which no one in court spoke, these difficulties are more apparent than real. As that witness said: “I wouldn’t imagine the constitutions have changed enormously because obviously there’s a lot of consistency between the code of 1917 and 1983.” While this expert witness, called on behalf of Pádraig Hickey, had conducted no study of the Marist Brothers, his general evidence as to how religious orders are structured and managed was capable of acceptance by the trial judge. He gave a general overview of how a religious order “organises itself in terms of the hierarchy” thus:
Judge, the order is an institute of consecrated life in the Roman Catholic Church. It would be known as … an autonomous institute of pontifical right which means it’s a religious order which is approved by the Holy See and … there are a number of superiors within it. I suppose they have a major superior who is based in Rome. The order is divided – he has oversight of the order which is divided into, I suppose, you might say provinces or I suppose by analogy to dioceses maybe for a bishop but it’s provinces and that a provincial brother in this case would be … in each of those provinces there’s individual houses which would have their own superior but the key superior would be the provincial brother …[w]ho is over the province who makes most … of the significant decisions. [Going down to the next level w]ould be the superior of a house. Yes, there would be three main levels of superiors. You’d have the major superior, the provincial superior and the local or house superior.
17. He confirmed that this was the “situation as prevailed” in 1969 to 1972. Asked by the trial judge as to the nature of the relationship between a Marist Brother and his superior, the witness emphasised their vows of chastity, poverty and obedience. Referring to the vow of obedience, he said:
In the case of any religious [member of an order], a vow of obedience would mean to the superior or the provincial superior that they … would carry out the pastoral assignments that had been entrusted to them, that they would live a life that would be compatible with the spirituality or the charism that is the – the charism is the distinctive work or apostolic work or spirituality of the order. So, the superior would ensure that a member of the order was living a life faithful to their vows, fulfilling their duties… Well, the motivation for obedience for religious would be different. It would be based on … religious motivations for … spiritual reasons to imitate, obviously, Jesus. … I mean, you can never obey something that’s immoral or unjust or against … moral principles of any kind. Definitely [it is somewhat more extensive than the realm of obedience that exists in normal civil society], and even within other parts of the church. I mean a priest would make a promise of obedience to his bishop as distinct of a religious makes a vow, they’re very different … shades of obedience, obviously, but a religious’ obedience is more comprehensive … You know, decisions are made with consultation also but there is, at the end, there’s a certain sense of trust, entrusting yourself to your superior …
18. Each Marist Brother surrendered his salary to his superiors and was, in turn, given modest living expenses. Asked about holding property, this witness indicated “I am beyond my competence”. He simply commented that as a matter of canon law, the Marist Brothers were entitled to own property but he added “I have no idea what they owned.” Nor did any other evidence or pre-trial procedure in any way further illuminate what property the Marist Brothers may have owned or the structures within which they owned it. Nor was there any evidence to indicate who precisely Brother McGowan was, what role he had in the Marist Brothers, whether he had held office for a particular time and had a predecessor. No evidence was called on this issue, crucial to the resolution of this case, on behalf of Brother McGowan.
19. From the point of view of vicarious liability, there was evidence upon which Ó Néill J could hold that ex-Brother Cosgrove while a Marist Brother was subject to direction by his immediate superior, in this instance the principal of the school, in ways that were equivalent to an employment contract and perhaps more binding. In terms of ordinary sense, the relationship between persons in religious orders is closer than in employment; the direction by their superior is stronger than that of a boss at work because he or she carries moral as well as financial authority; and the coherence of a group advancing temporal aims for spiritual purposes exceeds that of any secular organisation.
Vicarious liability
20. In the notice of appeal by Brother McGowan, it is pleaded that:

…the learned trial judge erred in fact and/or in law in relation to the finding of vicarious liability by failing to have any regard or any sufficient regard to the fact that [Brother McGowan] was not an employer of [Ex-Brother Cosgrove].
It is also contended that the trial judge erred “in failing to have sufficient regard to the actual employment relationship which did exist between [Ex-Brother Cosgrove] and the school manager.” The argument here is that the abuser was not an employee of the Marist Brothers but was in fact employed by the school manager who, in turn, employed all of the Marist Brothers staffing and managing the school. Again, this is a legal argument and again the absence of contradictory evidence on key issues of fact discloses a reliance on the key elements of the defence.
21. Ordinarily a tortfeasor will have only one employer at the time of the wrong for which the plaintiff seeks damages. There may be cases where the courts are required to determine liability as between two apparent employers. This is not one of those cases, as the only party in respect of which a relationship giving rise to vicarious liability was contended for was that between ex-Brother Cosgrove and the Marist Brothers.

22. The extension of liability beyond the tortfeasor, the party who actually committed the wrong in circumstances which attracts an award of damages, to another party is most often dependent on an employment relationship. That is not always necessary. The modern law of vicarious liability developed from earlier models of strict liability, whereby an innocent party became responsible for the wrong of another by reason solely of a relationship. Historically, the treatment of the origins of vicarious responsibility as set out in Fleming – Law of Torts (10th edition by Sappideen and Vines, New South Wales, 2011) illuminates that relationships apart from employment were one of the strands from which current legal principles developed. At paragraph 19.10 of that work, it is stated:

Vicarious liability is a familiar feature of most systems of primitive law, and early English law was no exception. A notorious example is the erstwhile liability of a husband for the torts of his wife. The responsibility placed upon the head of the household for the conduct of his familia was also the genesis of the master’s liability for the torts of his servants, which, despite a varied history reflecting considerable vacillations of judicial outlook, has remained the principal instance of vicarious liability in modern law.
23. While developments in the common law have most recently focused on control or participation in enterprise as criteria whereby it may be determined as to whether an actual employee, that is one receiving a salary from the party sought to be made vicariously responsible, is within the scope of his or her duties, circumstances outside employment enable a sufficient connection to impose liability on another party. That other is usually sought out because of apparent greater likelihood that they will have the ability to pay. In this jurisdiction, the leading example of a non-employment relationship giving rise to liability for the negligence of another is Moynihan v Moynihan [1975] IR 192. There, a householder was sued for the negligence of another, Marie, in placing a pot of tea covered with a bright tea cosy attractive to a child on a table where the child was left at large. Marie was the two year old child’s aunt and the householder was the child’s grandmother. The reasoning of Walsh J for the majority was dissented from by Henchy J, and has been otherwise criticised judicially and academically. The analysis, nonetheless, harkens back to the historic origins of the law whereby an innocent party may be made liable for the blameworthy actions of another by reason of relationship. At page 197, Walsh J stated:
The negligence attributed to Marie was not the casual negligence of a fellow guest but may be regarded as the negligence of a person engaged in one of the duties of the household of her mother, the defendant, which duties were being carried out in the course of the hospitality being extended by the defendant. The nature and limits of this hospitality were completely under the control of the defendant, and to that extent it may be said that her daughter Marie in her actions on this occasion was standing in the shoes of the defendant and was carrying out for the defendant a task which would primarily have been that of the defendant, but which was in this case assigned to Marie. As the defendant was the person providing the hospitality, the delegation of some of that task to her daughter Marie may be regarded as a casual delegation. Marie’s performance of it was a gratuitous service for her mother. It was within the control of the defendant to decide when the tea would be served and where it would be served and, indeed, if it was to be served at all. It was also within the control of the defendant to decide how it would be served.
24. Dissenting, Henchy J relied on the test which enabled liability to be established to a fault-free party where the relationship is of the party at fault performing work as a servant for the benefit of his master. Non-delegable duties were an exception to that rule, which reflected the distinction, which the law still maintains, between those engaged on behalf of another in a relationship of work and those merely hired on occasion to do a task: the chauffeur and taxi-driver distinction. While disavowing this authority, thus preferring the dissenting view, Professor Heuston in a classic edition of Salmond on Tort (17th edition, Heuston editor, London, 1977), nonetheless acknowledges that employment relationships alone are not the sole basis of vicarious responsibility in tort. Control is nonetheless essential. At page 460-461 the following is stated:
One person may be the servant of another although employed not continuously, but for a single transaction only, and even if his service is gratuitous or de facto merely, provided that the element of control is present. The relationship of master and servant is commonly a continuing engagement in consideration of wages paid; but this is not essential. The service may be gratuitous, as when a child acts de facto as the servant of his father. But this must not be taken too far. The owner of a dog is hardly liable if a friend takes it for a walk and a pedestrian trips over the lead carelessly held. Nor is a householder liable if a guest, as distinct from a hired domestic help, carelessly pours hot tea over a fellow-guest. For it must always be remembered that the mere existence of a right of control is not sufficient to found liability. Otherwise a parent would always be responsible for the torts of his child, or the Crown for the torts of its prisoners.
25. In any defendable analysis of a relationship based on control giving rise to vicarious liability, the distinction between a contract of service and a contract for services must not be blurred. The famous remark by the crane driver that “I will take no orders from anybody” noted in Mersey Docks v Coggins [1947] AC 1 by Lord Simonds at page 20 is in our time even more often replicated in the modern employment relationship where specialist operatives engage in tasks beyond the capability of their employer’s direction. Where even a minimal understanding of how to go about the task is absent from the employer, however, that does not absolve an employer of responsibility. What remains is the duty to engage safe systems and to explore reasonably how such systems might be implemented and to set appropriate rules. Tort law structures itself by imposing liability for the avoidance of future harm. As the Supreme Court of Canada stated in Bazley v Curry [1999] 2 SCR 534 at paragraph 33:
…[b]eyond the narrow band of employer conduct that attracts direct liability in negligence lies a vast area where imaginative and efficient administration and supervision can reduce the risk that the employer has introduced into the community. Holding the employer vicariously liable for the wrongs of its employee may encourage the employer to take such steps, and hence, reduce the risk of future harm.
26. Control, nonetheless remains a component part of the test whereby non-employment relationships attract vicarious liability in respect of those who engage in a task on behalf of another. In the instances where such liability was imposed, the degree of control was at a level where the relationship was at an equivalent level to employment. Because of statutory intervention providing for automatic liability of a car owner for the driver, the once illustrative use of vehicle cases are now less relevant. Fleming, however, notes at paragraph 19.50 the following situations:
A road haulier who provides his own truck may be an independent contractor even if the work is almost exclusively for one customer; while a radio artist engaged to participate in a particular play has been held to be a servant despite receiving a fee rather than a salary, because he was subject to extensive directions by the producer. The employment of a servant may be limited to a single occasion or extend over a long period; it may even be gratuitous. It applies alike to a manual labourer, a ship’s captain, a schoolteacher, a circus acrobat, a fireman, and a son occasionally requested to drive his invalid parent in the latter’s car. The continued use of the word “servant” is perhaps unfortunate, because it carries a colloquial connotation far narrower than its legal meaning…
27. This judgment is not to be taken as approving these authorities but as drawing on a relevant analysis. While these are instances of liability imposed outside the relationship of employment, what characterises them is a close scrutiny of the nature of the work provided and the extent and degree of control over that work within a particular context whereby it becomes inescapable that the relationship is equivalent to employment. In this instance, the careful questions of the trial judge illuminated that the obligations then assumed by ex-Brother Cosgrove had such equivalence. Indeed, the moral nature of the submission to religious vows, the duty of obedience, the unquestioning move from one teaching position to another and the strict nature of the obligation assumed within a religious order to accept direction show more than the employment relationship ever demands. Within the school, a teaching Marist Brother was equivalently under the direction of the Marist Brother principal of Saint John’s school and any relationship with either the school manager or the Department of Education was, in this instance, a matter of form. On the evidence, it cannot be seen as a matter of control or direction.
28. From the earlier rules, the modern approach to vicarious liability may fairly be recognised as having developed through policy considerations. Those who have control over an enterprise may not be able, as in prior times, to pretend to a knowledge or level of skill equivalent to their workforce, but are enabled to organise the manner of work and relations with those with whom it is engaged so that risks are reasonably anticipated and, through safety measures and training, are minimised. Of course, the absence of such engagement in foresight and prevention may of itself establish fault. The party, however, with the ability to assess risk and to guard against or insure against it will be the organiser of the work, usually an employer. In advancing the economic interests of the enterprise, a corresponding duty has arisen whereby those working for such an enterprise, as salaried individuals, and without the backing of capital, become as one with those who employ them. Tort liability thus pursues its part of the proper ordering of society because it incentivises an enterprise towards safety and away from wrongful conduct. Some will criticise the extension of vicarious liability in such a manner as a pursuit of those who have the ability to pay. As Fleming states at paragraph 19.10:

The effect of vicarious liability on the working of the modern tort system is profound. The link with personal fault is maintained in form, but does not control who pays. Identification of the employee as nominal defendant disguises the reality of the accident cost being borne by a larger, anonymous entity and eventually passed to a wider public.
29. The control test traditionally posits that liability is established where an employee is “subject to the command of the master as to the manner in which he shall do his work”; Yewens v Noakes (1880) 6 QBD 530 at 532 per Bramwell LJ. This formula emerges as strained in the present day, not only because of its archaic use of language. It is better to ask whether the person committing the tort in the course of some task is engaged as an integral part of a business; Stevenson v McDonald [1952] 1 TLR 101 at 111 per Lord Denning. The wrong should be committed, it was once said, in the course of employment and this meant that an employee “going on a frolic of his own” would not render an employer liable. With the emergence of cases where employees acted wrongly and against instructions, even to the point of effectively doing the opposite of what they were engaged to do on behalf of the employer, resort was had to the extension of the concept of what was within the course of employment to those unauthorised acts which could be regarded as wrongful and unauthorised ways of performing an authorised task. Thus in Colonial Mutual Life Assurance v Producers Assurance Co (1931) 46 CLR 41, an insurance agent rendered his employer liable notwithstanding an explicit prohibition in his contract of employment against using any language reflecting on the character or conduct of any person or institution, where he slandered a rival company. The High Court of Australia reasoned that since it was his task to solicit business, it was incidental to that task to select and use the appropriate means of drawing in the business of prospective customers.
30. Lloyd v Grace Smith [1912] AC 716, is the case most often cited by plaintiffs anxious to overcome what might seem a sensible principle that no employer, outside of organised crime, generally engages an employee to perpetrate frauds on customers. There, a firm of solicitors was held liable for the theft of mortgage monies by their managing clerk upon his inducement to a client to transfer the mortgage to him by means of a fraudulent misrepresentation as to the nature of the transaction. One hundred years ago, sexual abuse in a school, residential institution or therapeutic setting most certainly existed but no victim was bringing civil actions for damages. Resort was to criminal charges, if a complaint was believed and this was unlikely as reflected in special rules requiring corroboration of children and the downgrading of the testimony of those who did not understand the concept of an oath. Arching over all of that was a requirement that trial judges warn juries that it was dangerous, not even that it might be, to act on a person’s word unsupported by corroboration. Hence, vicarious liability was concerned with such wrongs as theft during the course of employment.

31. Since those older cases, conduct such as sexual abuse has been determined to fall within the scope of employment, notwithstanding the fact that such conduct is utter anathema to professions, such as teaching, which have as their ultimate aim the enhancement of the human spirit. No one engages a minister of religion to corrupt and denigrate youth. No one employs a teacher to molest children and adolescents. There may have been a time in the progress of the common law when this kind of conduct would have been regarded as beyond the no-fault responsibility of those engaging in work such as that engaged in by ex-Brother Cosgrove. Attitudes were then different. Their conduct might be regarded as akin to a surgeon who, instead of curing in the course of an operation, deliberately causes harm. That approach, of placing such conduct outside the sphere of what an employer can be liable for, is the basis of the dissenting judgement of Hardiman J in O’Keeffe v. Hickey [2009] 2 IR 309. This was another case in which the plaintiff, as a child, was sexually abused at her national school. The first defendant in that case was the abuser, the other defendants being State parties. He reasoned that cases such as Lloyd v Grace Smith and the Johnson & Johnson (Ireland) Ltd v CP Security Ltd [1985] IR 362, where an employer was held liable for thefts facilitated by a security man at a premises he was supposed to guard, were anomalies decided against the principled application of the law related to the control, or were bailment cases, or even cases of non-delegable duty. For him, strict liability was imposed on an employer for the torts of his employee where the acts were “authorised by the employer”, or while unauthorised were “so closely connected to the acts that the employer has authorised that they may rightly be regarded as modes – though improper modes – of doing what has been authorised.” This test is derived from Salmond on Tort, cited above, and goes back to the 1st edition of that work in 1907. Hardiman J said at page 328, citing a similar judgment of Costello J in Health Board v BC [1994] ELR 27:

I could not hold, on established principles, that the act of sexually abusing a pupil was within the scope of the first defendant’s employment. It was the negation of what he was employed to do, an act of gross and obvious criminality. At the time it was committed, in 1973, it was an unusual act, little discussed, and certainly not regarded as an ordinary foreseeable risk of attending at a school.
32. The earlier case of Delahunty v South Eastern Health Board [2003] 4 IR 349 at 377, per O’Higgins J, had left “open to question on a fuller analysis” whether sexual abuse could ever be within the scope of, in that case, a housemaster’s employment. In O’Keeffe v. Hickey, the majority analysis was that of Fennelly J, with whom Murray CJ and Denham J agreed. In that judgment, the decisions of the Supreme Court of Canada in Bazley v Curry (1999) 174 DLR (4th) 45 and of the House of Lords in Lister v Hesley Hall Ltd [2002] 1 AC 215 expanded the “improper mode of doing what was authorised” test, as the touchstone of employer’s liability, into a test emphasising the “closely connected” aspect of the Salmond rule. Both cases involved acts of sexual abuse in the context of authority over vulnerable young people, the opportunity for wrongdoing coming with the employment of the actual abuser and the setting within which the employer placed him. These authorities were followed by the High Court of Australia in New South Wales v Lepore [2003] HCA 4. In Lord Steyn’s analysis in the Lister case, at page 320, the issue was “whether the warden’s torts were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable.” Lord Clyde agreed and at page 234 suggested that “a broad approach” meant it became “inappropriate to concentrate too closely upon the particular act complained of”; which was clearly what all of the prior cases had been concerned with in connecting the fault of the tortfeasor to that of his faultless employer. Fennelly J commented at page 375:
The theoretical underpinnings of the doctrine of vicarious liability are much debated but no clear conclusion emerges. The result is that strict liability is imposed on an employer regardless of personal fault, which is especially striking when the acts are criminal and could not conceivably have been authorised, even impliedly.
33. Adopting the close connection emphasis, in Lepore, Gleeson CJ at paragraph 74 indicated that there may be a range of relationships authorised by schools in the instruction of or care for pupils. These might range from academic development where the educational environment merely provides an opportunity for abuse to much closer relationships. It might be commented that the former is more characteristic of third level teaching while at primary level, a teacher may take on a mantle more akin to the responsibilities of parental authority. Thus not all instances of the abuse of pupils by teachers came within the close connection test as it has now developed. Gleeson CJ commented:
However, where the teacher student relationship is invested with a high degree of power and intimacy, the use of that power and intimacy to commit sexual abuse may provide a sufficient connection between the sexual assault and the employment to make it just to treat such contact as occurring in the course of employment.
34. While Fleming comments that the usual means of imposing tort liability is the creation of unreasonable risk, and wonders why “a different approach should be taken to vicarious liability”, vicarious liability should be seen as part of a weave of liability which enjoins responsibility where it should be exercised. The editors of that work continue at paragraph 19.130:
More seriously, it is doubtful whether trying to ascertain whether there was a “sufficiently close connection” between the enterprise and the wrongful act to justify the imposition of vicarious liability is an easier exercise than applying the old “unauthorised mode of performing an authorised task” approach. Both require an examination of what the employee was authorised to do and what was actually done. This difficulty is evident in the continuing unpredictability of the judgments which have attempted to employ the newer language.
35. It may be remarked, however, that legal tests which admit of perfect predictability are more than rare. A test in law seeks to define the parameters within which liability may be imposed, while it is the factual matrix for the application of a legal definition which changes in a potentially almost infinite way from case to case; hence the divergence between practice and commentary. The close connection analysis was adopted by the majority of this Court in O’Keeffe v. Hickey. Certainly, on the traditional Salmond test, no school and no genuine religious order would authorise or endorse sexual predation on vulnerable children or adolescents, and while such torts might be perpetrated by teachers, it did not follow that this, of itself, established a sufficiently close connection for the transfer of liability to the employer. All depended upon an analysis of the particular circumstances. That continues to be the law. Ultimately, the test to be applied is that set out by Fennelly J at page 378 of the judgment in O’Keeffe:
The close connection test is both well established by authority and practical in its content. It is essentially focussed on the facts of the situation. It does not, in principle, exclude vicarious liability for criminal acts or for acts which are intrinsically of a type which would not be authorised by the employer. The law regards it as fair and just to impose liability on the employer rather than to let the loss fall on the injured party. To do otherwise would be to impose the loss on the entirely innocent party who has engaged the employer to perform the service. The employer is, of course, also innocent, but he has, at least, engaged the dishonest servant and has disappointed the expectations of the person to whom he has undertaken to provide the service. There is no reason, in principle, to exclude sexual abuse from this type of liability. That is very far, as I would emphasise, from saying that liability should be automatically imposed. The decision of O’Higgins J. [in Delahunty v South Eastern Health Board [2003] 4 IR 349] provides an excellent example of the practical and balanced application of the test. All will depend on a careful and balanced analysis of the facts of the particular case. In Bazley v. Curry (1999) 174 DLR. (4th) 45 the employees of the care home were required to provide intimate physical care for the residents. The sexual abuse was held to be closely connected.
36. In this case, the wrong suffered by Pádraig Hickey through the perverted attentions of ex-Brother Cosgrove were intimately woven into the web of school life. As a pupil, he had but one teacher over that handful of years; the initial setting of abuse was in the context of teaching a musical instrument, a task which requires gentle physical contact as to the proper approach to playing; the sexual violence was continued in a classroom setting; it was most often perpetrated during actual teaching; and it was a pretence at scholastic instruction. All of this establishes not authorisation or approbation, which is not essential to the vicarious sharing of liability as between the tortfeasor and the employer, but rather a close connection between the task devolved to the wrongdoer and the wrong complained of. While criminal and unauthorised, this predation was more than merely a setting for the individual wrong but, instead, was actually made intrinsic to the work which the employee had been engaged to pursue.
Representative order
37. On a consideration of the transcript of the trial in the High Court, it is notable that, after Brother McGowan is mentioned on the first line of the first day, 28th November 2012, there is silence as to who he is, his position and the structure within which he operated throughout the entire trial. On appeal, all sides accepted that he is now the current head of the Marist Brothers in Ireland. The lack of pre-trial procedures relevant to the issue of his status has already been commented upon. Order 15 rule 9 of the Rules of the Superior Courts provides that in a case where there are “numerous persons having the same interest in one cause” then by order of the High Court one of them take an action “or be authorised by the court to defend” for the benefit of or “on behalf … of all persons concerned.” Order 4 rule 9 provides that where an action is taken or defended “in a representative capacity, the indorsement shall show … in what capacity the plaintiff or defendant sues or is sued.” No such application was made. The statement of claim, dated 31st July 2002, is not indorsed in that way but pleads that Brother McGowan “is sued in his capacity as head of the religious order known as the Marist Brothers having its principal office at Moypark College, Clondalkin in the County of Dublin.” Whereas a company is required by legislation to have a registered office, this plea may be taken as merely descriptive of an unincorporated body.

38. On occasion, enough may be done to include those outside a representative order schedule in an action or in the defence of one. That is rare. The strictures in the Rules should be followed because then everything is clear to the parties. In Greene & Others v Minister for Agriculture [1990] 2 IR 17, a group of 5 farmers objected to being excluded from being able to obtain certain payments available under a rural regeneration scheme but pleaded that the action was taken in the name of “all farmers” in areas affected, in particular those hundreds of farmers listed in a schedule supplied to the defendant minister. While the point was taken by the Minister that a representative order was necessary, evidence as to who signed a petition urging the action and made a financial contribution at meetings throughout the country sufficed for Murphy J to conclude that the action was brought on their behalf. In the event the relief sought was refused and the case was settled on appeal. The limits of the evidence in this case have already been mentioned. There is nothing to enable a finding that this is truly a representative action. It is an action against the named defendants.
Unincorporated associations
39. Both sides on this appeal seem to agree that the Marist Brothers have not been incorporated into a company or into any other legal entity recognised by law. It is possible that they now hold property and it is highly probable that in the past, in particular during the dates when one of their number abused Pádraig Hickey, that this was also the situation. All that is known about the Marist Brothers and what property they may own is what may be deduced from the necessarily sketchy evidence of Reverend Professor Mullaney. Sketchy in the absence of any defendant testimony. He indicated that he knew nothing about whether the Marist Brothers “is an incorporated association”. He was asked if they owned property and replied “I don’t know what they owned but … I would say … by canon law they were entitled to own property as an Order, but I have no idea what they owned.” He was not even aware if there was now an “Irish province” of the Marist Brothers. He pronounced himself as “indifferent to the specifics of the case”, but was only testifying as an expert on canon law. Such an organisation “might decide to buy property or own property or hold money in trust”, he agreed, by “setting up a juridical person in canon law.” That “would also have to be compatible [with] whatever is the equivalent in civil law.” But, the normal position would be that “if you set one up in canon law you’d have to have something corresponding in civil law, like a trust, for example. … It depends on the legal system you are in, yes.” Unfortunately, no evidence was offered by the Marist Brothers as to who they were or how they organised themselves or as to their structure. No definite or understandable comment in that regard was made by their legal representatives. Pre-trial correspondence and applications were non-existent in this case. Consequently, no admission to clarify any such matter was sought in open correspondence.

40. Ó Néill J held Brother McGowan liable on the basis of reasoning derived from a case decided by the Supreme Court of the United Kingdom shortly before the trial; Catholic Child Welfare Society & Ors. v. Various Claimants (FC) & Ors [2012] UKSC 56, [2013] 1 All ER 670, [2013] 2 AC 1, and commonly called the CCWS case. There, several pupils at a boarding school run by the De La Salle Brothers, a teaching order similar to the Marist Brothers, were sexually abused by some of their number. At the time the abuse took place, the school had been a residential placement home for children in distress and the teaching brothers partly staffed it, with supervision responsibilities over dormitories. The school owners, a charitable trust, had engaged the order to manage and teach at the school. Obtaining an order against that trust satisfied the claimants. The trust was not content. As co-defendants with the Order, it sought contribution from that unincorporated association of De La Salle Brothers. This failed at trial and in the Court of Appeal but succeeded in the Supreme Court. At paragraph 20 of that case, Lord Phillips set out four propositions which were, ultimately and after analysis, applied by Ó Néill J to this case. These were:

i) It is possible for an unincorporated association to be vicariously liable for the tortious acts of one or more of its members: Heaton’s Transport (St Helens) Ltd v Transport and General Workers’ Union [1973] AC 15, 99; Thomas v National Union of Mineworkers (South Wales Area) [1986] Ch 20, 66-7; Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366.
ii) D2 may be vicariously liable for the tortious act of D1 even though the act in question constitutes a violation of the duty owed to D2 by D1 and even if the act in question is a criminal offence: Morris v CW Martin & Sons Ltd [1966] 1 QB 716; Dubai Aluminium; Brink’s Global Services v Igrox [2010] EWCA Civ; [2011] IRLR 343.

iii) Vicarious liability can even extend to liability for a criminal act of sexual assault: Lister v Hesley Hall [2001] UKHL 22; [2002] 1 AC 215.

iv) It is possible for two different defendants, D2 and D3, each to be vicariously liable for the single tortious act of D1: Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others [2005] EWCA Civ 1151; [2006] QB 510.

41. Given that the law now accepts that vicarious liability can be established for a crime, but only after a close analysis of the centrality of the wrong to the work engaged, the central issue becomes the liability imposed on Brother McGowan by the trial judge. This raises the question of the liability of unincorporated associations and succession to that liability. It was submitted to the trial judge, as it has been submitted on appeal, that liability can be established only against a person or a body having legal personality in law, such as a company. It appears from the CCWS decision that the De La Salle Brothers operated through a body, called “the Institute”, and it appears as well that counsel for that entity took no point “on the nature of the Institute.” Ó Néill J, even though there was no such concession in this case, applied the following passage from the judgment of Lord Phillips at paragraphs 31 and 32 directly to the circumstances of the case before him:
I can appreciate [the] difficulty in accepting that a De La Salle brother in Australia could be vicariously liable for the sexual assault by a brother at St William’s. Indeed, there is something paradoxical in the concept of an attempt to hold vicariously liable a world wide association of religious brothers, all of whom have taken vows of poverty and so have no resources of their own. So far as individual defendants are outside the jurisdiction this might also have given rise to an interesting question of conflict of laws. This is, however, a long way from the realities of these proceedings and Lord Faulks has not taken any point on the nature of the Institute.
It is open to the claimants on the pleadings to seek to establish vicarious liability on the part of an unincorporated association made up at the relevant times of the brothers world wide, or of members of the London Province, or of the England Province, or of the Great Britain Province. At the end of the day what is likely to matter will be access to the funds held by the trusts, or to insurance effected by the trustees. Whether one looks at the picture world wide, or within Great Britain, the salient features are the same. The Institute is not a contemplative order. The reason for its creation and existence is to carry on an activity, namely giving a Christian education to boys. To perform that activity it owns and manages schools in which its brothers teach, and it sends its brothers out to teach in schools managed by other bodies. The Institute is, for administrative purposes divided into Provinces, each administered by its Provincial. To carry out its activities it has formed trusts that have recognised legal personality. The trusts are funded in part from the earnings of those brothers who receive payment for teaching. The trust funds are used to meet the needs of the brothers and the financial requirements of the teaching mission.

42. Lord Phillips continued at paragraph 33 in seeming to accept that De La Salle Brothers in Australia were unlikely to be responsible for what happened in the local school where the abuse was perpetrated in England. He said:
It seems to me more realistic to view the brothers of the Province from time to time responsible for the area in which Market Weighton lies as members of the relevant unincorporated association rather than the Order as a whole, but I doubt if it makes any difference in principle. Because of the manner in which the Institute carried on its affairs it is appropriate to approach this case as if the Institute were a corporate body existing to perform the function of providing a Christian education to boys, able to own property and, in fact, possessing substantial assets.
43. Applying that passage directly, at paragraphs 68 and 69 of his judgment, Ó Néill J held:
In my opinion, the foregoing passage from the judgment of Lord Philips, and in particular the last quoted paragraph, could apply with little adaptation to the role of the Marist Brothers in this case. I find the reasoning of Lord Philips in this regard compelling and I adopt it as necessary to arrive at a just outcome of the litigation. To hold otherwise, as submitted on behalf of the first named defendant; that the Marist Brothers were merely an unincorporated band of individuals is to ignore the reality of their true collective identity, to ignore their common purpose, to which each member is committed individually and collectively on behalf of all of the Brothers; to ignore that for the purposes of carrying out their mission, they necessarily acquire and manage property, no doubt held by trustees for the benefit of the congregation; that in their necessary commercial dealings with the world at large, for example, in employing lay staff, in effecting insurance policies, they must do so under the collective identity or personality of the Marist Congregation, albeit acting through trustees.
Having regard to all of this, is it right, when it comes to the issue of vicarious liability, that the well-known identity of the Marist Congregation can simply disappear into the sands of unincorporated association? I do not think so. In my opinion, the position of the first named defendant as Provincial of the Marists is to be seen, for the purposes of this litigation, as representative of the province of the Marist Congregation in which St. John’s National School was located, and I would follow the reasoning of Lord Philips in the CCWS case and hold that it is right to approach this case on the basis that the Marist Brothers were a corporate body existing to perform the function of providing a Christian education to boys and that the first named defendant is sued as a representative of that body, which is vicariously liable for the tortious acts of the second named defendant.

44. The differences between the CCWS case and the present case were stark. What they have in common is the fact that the tortfeasors were in each instance religious brothers bound by ties of obedience and poverty to an identifiable canonical body. In the CCWS case, it had been proven at trial that the De La Salle Brothers had corporate features, “including a hierarchy of authority.” With that feature, the Marist Brothers coalesce. The De La Salle Brothers were proven to have created “legal bodies that are capable of owning property and entering into legal relations” in pursuit of their teaching mission. The structure of the order was described in the CCWS case, and may be akin to the order in this case. It may be governed by a superior in Rome, or elsewhere, though this is not in the evidence, and it may have groups administered locally. This again is not in the evidence beyond a question by counsel for the Marist Brothers to the effect that there “is no Irish chapter”, to which no answer was given. When did that mean and why was there no defence evidence about it? In the CCWS case, it was proven that under the vow of poverty, amounting to surrender of financial autonomy to the superior, there had been set up “a 1947 trust relating to property held” for the London province and the British province. There was also a “1953 trust relating to property held in connection with the England province”. A member of the De La Salle order testified that brothers surrendering their salaries covenanted those earnings to the trust and that the trust had substantial funds derived from “the sale of its properties and from the covenanted funds”. Thereafter it became part of the trust functions to support the brothers in retirement or decline.
45. It seems probable that in this case as well there must be trusts. There must be property held by trusts and of necessity this implies that there are trustees with obligations under trust deeds to the beneficiaries of the trusts. But who are these? What is the nature of the trusts? It could be the present brothers, the past brothers or the pupils who are to benefit. There was no exploration. A trust, absent statutory intervention, cannot under common law sue or be sued because it has no legal personality. While it is common in law reports to have a group of individuals described as the trustees of a particular organisation, the suit giving rise to the case relates to the obligations entered into by them on behalf of the beneficiaries and the discharge of or misfeasance of the duties they have bound themselves into. Cases also exist where a trust is sued for what is done on its behalf. This entity, the Marist Brothers, may be backed by a trust or by several trusts from that time but the order is an unincorporated association with all that implies in law. An unincorporated association is defined in Conservative and Unionist Central Office v Burrell [1982] 2 All ER 1 at 4 as:

…two or more persons bound together for one or more common purposes, not being business purposes, by mutual undertakings, each having mutual duties and obligations, in an organisation which has rules which identify in whom control of it and its funds rests and upon what terms and which can be joined or left at will.
46. An unincorporated association has no legal status of itself but, like a trust, is capable of being proceeded against, or proceeding, in law through its members. Hence, people resort to representative orders. Regarding the peculiar legal status of unincorporated associations, Warburton on Unincorporated Associations (2nd Ed, London, 1992) at page 2 provides the following description:
An unincorporated association has no legal status apart from the members of which it is composed. No separate body with limited liability comes into being on the formation of an unincorporated association…This does not mean that no legal consequences follow from the founding of an unincorporated association. The members have duties and liabilities to each other. The source of those duties and liabilities is partly the general law but mainly the [construction of the] rules of the particular association.
47. Unincorporated associations are a broad category. They can encompass organisations ranging from a local chess or Gaelic Athletic Association club to a highly organised institution like the Marist Brothers. The difficulty with this case is that, in practical terms, the Marists Brothers seem to have many of the characteristics of an incorporated association; to the point where they resemble an incorporated association more than they do a typical unincorporated association for sporting or recreational purposes. The organisation most probably has a clear hierarchical structure, operates both nationally and internationally, it must own, or have owned, land and, without making any impermissible assumptions or inferences, would possess far greater monetary resources and obligations than small unincorporated associations. The order was also, in undertaking to provide primary education, engaging in an activity that has a significant public dimension and which demands a degree of professionalism and responsibility, quite unlike most unincorporated associations. In simple terms, the operation of the Marist Brothers must be far from a local hurling or bridge club, to the extent that any legal rule which would treat both similarly for the purposes of vicarious liability has the potential of leading to unfair outcomes. Any test that would seek to apply vicarious liability to unincorporated associations must take this distinction into account.
48. Lord Phillips posits the proposition at paragraph 20 that an unincorporated association can be liable vicariously for the wrongs of those acting for it. He seems to mean the association itself assuming corporate status while not being a corporation. That does not represent the law. Where people group together to employ someone, are not incorporated, and that person negligently injures someone, the members of the group can, however, be liable. That is different. This means no more than that members of a group responsible at the time for the negligent organisation of an event share liability. That liability appears to be a present one and not a continuing one. That is not to somehow incorporate a group, to give it legal personality. It is the individual members, not generally those who succeed them, possibly subject to an observation as to corporation made later herein. So, a group or association is not like a trust. Trustees can be succeeded, but the obligations under the trust deed remain and the trust property continues to be held. But, a group of religious brothers bound by oaths may change as to membership, people may leave and as in really old cases of sexual abuse, people will die or retreat into ill health. Of the cases cited by Lord Phillips for that proposition, vicarious liability was found against a union in picketing in Thomas v National Union of Mineworkers [1985] 2 All ER 1 because of the actions of a local branch; Heatons Transport Ltd v TGWU [1972] 3 All ER 101 was about liability of a union for the actions of a union official; and Dubai Aluminum Co Ltd v Salaam and others [2003] 1 All ER 97 concerned the liability of a partnership. There is no analysis in these cases of the liability of members of an association for the actions of a person who does something for them. Lord Phillips simply states the principle but the cases do not support it by any statement of principle. As O’Donnell J also observes in his judgment in this case, these are not examples of purely unincorporated associations.

49. There must, as a matter of ordinary logic, be occasions where unincorporated associations, consisting of the body of members of the association, may become liable. Warburton states that the members of an unincorporated association may become liable where, firstly, they are all carrying on the activities in question or, secondly, “where they are in overall control of activities being carried on by some of the members.” The examples given are of Evans v Waitemata District Pony Club [1972] NZLR 733 where a club put on a horse show but organised it negligently, thus allowing the plaintiff to be injured and Stone v Bolton [1950] 1 KB 201 where the Court of Appeal acted on the assumption that members of a cricket club could be liable for a cricket ball injury in nuisance because of occupation and the House of Lords, [1951] AC 850 in negligence. In the result, there was no liability because, according to Lord Normand, “It is not the law that precautions must be taken against every peril that can be foreseen by the timorous.” The party charged with responsibility was the committee of the cricket club. There is no discussion in these cases as to the point on the nature of the committee. Real authority is therefore thin but is supplemented by the analysis and authorities cited in the separate judgment of O’Donnell J; see particularly the compelling analysis by Gannon J in Murphy v. Roche & Ors (No.2) [1987] 1 IR 656.

50. On first principles, however, a proposition of several people engaging another to do a job, but who acts negligently on behalf of the group, is similar to an employment situation. The difference is that the employer is not a corporation or a person but is a group. If three people decide to operate a green grocer’s shop and engage as part of their joint enterprise another person to sell their wares, but that person contaminates the produce with bacteria, causing illness in consumers, no principle is identifiable whereby the three operators of the shop may escape vicarious liability. In the cases cited, it was the committee of the cricket club or the horse gymkhana that set up the situation who were variously made liable. In a club it is the same, though usually the actual organisers are engaged.

51. As for the proposition put forward by Lord Phillips that an individual tortfeasor may have two masters, this may be so but it must surely depend on control. It may not be so different to liability by a group in respect of a person engaged on a task for them, supposing the employee and independent contractor issue is resolved in favour of the plaintiff. The test of control over the work of the employee is, in a more specialised era, better expressed in terms of consideration of the issue of who has the authority to organise the work, its rules, its direction and appropriate safeguards. All may be done properly by the employer but the employer may nonetheless be liable because of the attribution of fault due to control. There may be situations where the employee is genuinely under the control of two masters, but as control is the test, no facile resort to multiple liability is possible. Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others [2005] EWCA Civ 1151; [2006] QB 510 is authority for the proposition that a worker on a building site who causes a flood can be working for two separate contractors. It would follow that if an unincorporated association can be liable for the actions of one who, in the course of fulfilling their instructions, acts negligently, there is no reason why two employers cannot be charged with the responsibility for ensuring the proper working of an employee. The ordinary, and almost invariable situation, is that as a matter of fact it will be clear that a particular worker is tasked to a particular job under the control of what will be a clearly identifiable employer. That factual situation is not going to change save in rare circumstances.

52. Thus it is established that a plaintiff may sue a group who have employed a person on a task but where due to that person’s misconduct or negligence the plaintiff is injured. Liability in that case is of the group jointly and severally for the tort vicariously attributed to them. In O’Keeffe v Hickey, a principal issue was the liability of the State for sexual abuse perpetrated on the plaintiff by a teacher when she was a pupil in a national school. The majority held that the State could not be liable because there existed no sufficiently proximate relationship between the State and the teacher amounting to control. In his dissenting judgment at paragraph 180, Geoghegan J considered that “exemption from vicarious liability by the State is not just.”

53. This is the first case, certainly in this Court, where this point of no liability because of no incorporation has been raised. With discovery, it might have been ascertained what assets were held by the Marist Brothers and through what legal vehicles. Those could have been joined in the suit using the O’Byrne letter procedure; section 78 of the Courts of Justice Act 1936, but now there are obligations such an initial letter under section 8 of the Civil Liability and Courts Act 2004.

54. What has gone before might usefully be summed up. A group, such as a club or a committee or a religious order, can employ or engage a person in a quasi-employment relationship to work for them. The wrong of that person may make the entire group liable on the same basis of vicarious responsibility as a corporation or other employer. The case law counsels swift action, however. The group is unincorporated. So, it does not continue. With the passage of decades, considerations other than limitation of actions arise. New committee members, new members of the club, new members of the religious order have nothing to do with the liability of their predecessors. That is the nature of unincorporation: rights and liabilities do not continue despite people calling themselves the same name. When they are gone, the liability is not passed on. An exception may arise, however, where one of the group on which vicarious liability is imposed is a corporation sole, for instance a bishop. His successors may remain liable provided that the concept of corporation sole is argued and found applicable. This reasoning dissents from that of O’Donnell J that an allegation against Brother McGowan that he is now head of the Marist Brothers, equates to a plea that he, as the current head of that organisation, was a member back in 1972 and is consequently vicariously liable. There surely would have to be a plea to that effect? There was not. If there had been, surely Brother McGowan would have been on notice of this point and would have given evidence as to when he joined the Marist Brothers. But, even still, ordinary fairness in procedure surely requires that Brother McGowan and Pádraig Hickey be enabled to give evidence.
Corporation sole
55. Liability, on the other hand, if it exists, based on the continuation of responsibility from head of the Marist Brothers to head of the Marist Brothers is consistent with the basis of suit. It may be that an exploration of the nature of the Marist Brothers will indicate that its head can be recognised as a corporation sole. While on the hearing of this appeal, the argument centred on who Brother McGowan was and how and whether he could be made liable, in O’Keeffe v Hickey the position of the school manager, a priest appointed by the bishop patron as in this case, was discussed. In particular, there was a serious issue as to “why the Church was not sued.” Geoghegan J records that the answer was a practical one of finding the personal representatives of the estates of the manager and patron of the school liable because, as in this case, the passage of decades had seen them die before proceedings were issued. The parents in the case had taken the advice of a journalist on the abuse being revealed by one small girl and after a boycott after a heated meeting by parents, the abusing teacher had left the school to take a position elsewhere but no complaint was made to the Department of Education or to the gardaí. These were different times. At paragraph 181, Geoghegan J commented:

I am not entirely convinced that in this day and age the fact that a bishop/patron is not a corporation sole should necessarily preclude an action against the current bishop and execution against the diocesan assets. But none of that arises here. I think there have been many cases in the past where actions have been brought against a diocese relating to events that occurred under a former bishop and where a current bishop would not take the point either as a matter of honour or because of insurance cover or both. But again none of that arises in this case.
56. That observation did not amount to a ruling that a bishop was not a corporation sole. The matter does not seem to have been argued. This category of artificial persons had its origin in ecclesiastical law; see FW Maitland – The Corporation Sole (April, 1901) LXIV LQR 335. Most often it is a bishop of a diocese but at common law it seems to be recognised that it can also be other clerics. Some jurisdictions such as the United States continue to recognise the corporation sole; see James B O’ Hara – The Modern Corporation Sole (1988) 93 Dick L Rev 23. The concept was imported at common law into that jurisdiction but has for centuries been regulated by statute for the purpose of holding property and for the succession of rights of action or liability for civil wrongs committed by its servants. Now, because of statutory recognition within the states of that union, corporations sole are entirely creatures of statute and the common law concept has ceased; Wright v Morgan (1903) 191 US 55 at 59.
57. Nonetheless, within that jurisdiction corporations sole as applying to the Catholic Church were recognised at common law following the Declaration of Independence. That had been the case in England, and by extension also in Ireland at least prior to the application of the Reformation. Blackstone, in his Commentary on the Laws of England (1765-1769) at 457 distinguishes corporations sole from corporations having “many persons united together into one society, and are kept up by a perpetual succession of members”. Blackstone extends the scope of the concept outside that of the English monarch and bishops in the same passage:

Corporations sole consist of one person only and his successors, in some particular station, who are incorporated by law, in order to give them some legal capacities and advantages, particularly that of perpetuity, which in their natural persons they could not have had. In this sense the king is a sole corporation: so is a bishop: so are some deans, and prebendaries, distinct from their several chapters: and so is every parson and vicar.
58. It is to be noted that the early editions of Halsbury’s Laws of England, as of the time of Irish independence, follow that concept. The second edition of that work, in 1933, just prior to the enactment of the Constitution, states that an “archbishop, a bishop, a prebendary or cannon, a dean, an archdeacon, a parson, a vicar and a vicar choral are each a corporation sole.” It is an open question if this law applies to the Catholic Church and in particular to persons exercising equivalent or parallel positions. With the penal suppression of the Catholic Church in England and Ireland, legal recognition was expressly confined to the Anglican Church. Did that change the law, making it possible only for Anglicans to have corporations sole and not Catholics? Could that really be the law of this country? Is it possible that in disestablishing the Church of Ireland in 1871, the abolition of every ecclesiastical corporation also accidentally applied to the Catholic Church? The principle against accidental alteration of the law may otherwise suggest; see Bederev v Ireland & AG [2016] IESC 34. The utilitarian nature of the law at the time of Blackstone makes it clear that the necessity for the institution means that it applied to the person as a corporation by reason of his nature and function:
[T]he necessity, or at least use, of this institution will be very apparent, if we consider the case of a parson of a church. At the original endowment of parish churches, the freehold of the church, the church-yard, the parsonage house, the glebe, and the tithes of the parish, were vested in the then parson by the bounty of the donor, as a temporal recompense to him for his spiritual care of the inhabitants, and with intent that the same emoluments should ever afterwards continue as a recompense for the same care. But how was this to be effected? The freehold was vested in the parson; and, if we suppose it vested in his natural capacity, on his death it might descend to his heir, and would be liable to his debts and incumbrances; or, at best, the heir might be compellable, at some trouble and expense, to convey these rights to the succeeding incumbent. The law, therefore, has wisely ordained, that the parson quatenus parson, shall never die, any more than the king; by making him and his successors a corporation. By which means all the original rights of the parsonage are preserved entire to the successor: for the present incumbent, and his predecessor who lived seven centuries ago, are in law one and the same person; and what was given to the one was given to the other also.
59. Since the Anglican Church seems to have inherited the rights and obligations of the former church, the concept seems of general application. Certainly, to exclude, as in the times of penal suppression, one church would not seem right. It has not been argued as to whether this position continues to obtain under Bunreacht na hÉireann and in particular Article 50. Halsbury (5th edition, 2008) volume 24 at paragraph 314 states:
A corporation sole is a body politic, having perpetual succession, constituted in a single person, who, in right of some office or function, has a capacity to take, purchase, hold and demise (and in some particular instances introduced by statute, power to alienate) real property, and now, it would seem, also to take and hold personal property, to him and his successors in such office for ever, the succession being perpetual, but not always uninterruptedly continuous; that is there may be, and often are, periods in the duration of a corporation sole, occurring irregularly, in which there is a vacancy, or no one in existence in whom the corporation resides and is visibly represented. Unlike a corporation aggregate, a corporation sole has a double capacity, namely its corporate capacity and its natural or individual capacity; so that a conveyance to a corporation sole may be in either capacity.
60. Liability of Brother McGowan as a corporation sole succeeding to the liability of the head of the religious order when this abuse was perpetrated, whether he is a corporation sole, if that legal entity continues in Irish law, cannot be decided now. It has not been argued because the focus was on the failure to establish the liability of an unincorporated group. There can be liability on a set of persons. That is not to make the group into a corporation. It is to acknowledge liability to the victim of a tort of those who organised an employee or quasi-employee, a religious brother. That liability is against each person in the group as it then was. That liability does not continue unless one of them is a corporation sole. Then it may, depending on the state of the evidence. On the state of the evidence, the teaching by ex-Brother Cosgrove was for the Marist Brothers. There is now and there was then a head of that unincorporated association. The head of the Marist Brothers had to be a member of the group in respect of whom vicarious liability arises. The successor to the corporation sole may still carry that liability depending on the viability of the concept of corporation sole in Irish law. As this discussion illustrates, that concept is uncertain. That is a matter for argument in the High Court, or since the majority disagree with a retrial and would simply uphold liability against Brother McGowan, a point for some other case.
Retrial
61. While the judgment and order of the High Court must be reversed, the issue arises as to whether there should be an order for a retrial. Such a retrial would focus solely on the continuation of the concept of corporation sole in Irish law and its applicability to the head of a religious order. It would leave in place the findings of vicarious liability upheld in this judgment. Such an order has been sought by counsel for Pádraig Hickey in the event of the order of the trial judge not being upheld on appeal.

62. Order 58 rule 29 of the Rules of the Superior Courts, provides that subject “to the provisions of the Constitution and of statute” the Supreme Court may “exercise or perform all the powers and duties of the court below” and “may give any judgment or make any order which ought to have been made and may make any further or other order as the case requires.” The former rule was Order 58 rule 9, but there are no decided cases noted on the circumstances wherein this Court ought to order a retrial in Delaney and McGrath – Civil Procedure in the Superior Courts (Third Edition, 2012, Dublin) at page 717. The matter is therefore one where this Court must be guided by experience as to the right form of order to make in such a case.

63. No proper exploration was made as to the concept of corporation sole at trial in the High Court. This is despite the issue being mentioned in the leading case in this area, namely O’Keeffe v Hickey. It would be wrong for this Court to decide that issue in the absence of argument. As it has been alleged in the High Court that Brother McGowan was sued as representative of the Marist Brothers, that encapsulates an allegation that he is liable as part of the unincorporated group. If the concept of corporation sole applies to the head of that order, and he is the successor, the liability from 1972 continues. It would not be right, however, for each side to be deprived of an opportunity to argue this point. Further, it would not be appropriate for this Court to decide it, as it may require evidence. But why, as with so much else, was it not previously argued and is it right to allow a retrial on this issue?

64. Experience suggests that the normal circumstance whereby a retrial of a specific issue is ordered on appeal is where an error of law by a trial judge has resulted in an order that does not accord with law. Sometimes cases are sent back in that context for the hearing of further evidence or submissions in order that a correct order may be made. Sometimes, as in this case, only a defined portion of the case is reverted to the High Court. In the consideration of any such issue, the justice of the case must be the touchstone by which a decision is made.

65. It may be argued that the consequences of the various steps taken in this case in the High Court should not be visited on Brother McGowan or on the Marist Brothers. That argument may sound in costs, but in the wider context procedural wrangling cannot be allowed to be productive of injustice. Litigation is not solely about the interplay of rules which carry little or no consequences, as in a game. The results of litigation seriously affect the parties to that litigation and the legal system strives to afford relief not to those who are best at its manipulation but rather to pursue the cause of justice. At all times the Marist Brothers knew that they were being pursued for vicarious tort liability in respect of their former member, Christopher Cosgrove. As in other cases, the CCWS decision being a case in point, it would have been possible for that order to have presented evidence with a view to assisting the judge as to a proper determination. It is less than satisfactory for civil cases to be defended on the basis of some parallel with the right to silence in criminal law.

66. There is a further point. The issues as to identity and succession to or continuation of liability have surfaced in other cases, most particularly in O’Keeffe v Hickey. These issues are of high public importance. On this appeal, this Court cannot resolve them because of the deficit of evidence available to the court. In addition, the matter should be argued at first instance. It is only by adducing such evidence that this case may be properly resolved. The duty of the Court is to make such order as the case requires.

67. The matter should therefore be referred back to the High Court to that limited extent.
The Civil Liability Act
68. Ó Néill J reduced the damages in this case on the basis that the plaintiff ought to have pursued the school manager. The argument presented was that the pursuit of the school manager would have yielded another party with liability to damages. The argument made on behalf of Brother McGowan was that s. 35(1)(i) of the Civil Liability Act 1961 required that reduction. The section provides that for “the purpose of determining contributory negligence”:

where the plaintiff’s damage was caused by concurrent wrongdoers and the plaintiff’s claim against one wrongdoer has become barred by the Statute of Limitations or any other limitation enactment, the plaintiff shall be deemed to be responsible for the acts of such wrongdoer;
69. On this point, the trial judge ruled at paragraph 75:
Whilst I am satisfied that in law, there can be dual vicarious liability in respect of tortious acts of another, in this case, I am satisfied on the evidence that by far the greatest element of control over the teaching activities of the second named defendant rested with his superiors in the Marist Congregation and the manager of the school had little or no role to play in any of this. The manager did, however, retain his residual legal authority over the contractual arrangements between the manager and the second named defendant, an authority which cannot be treated as negligible or a nullity. However, a fair apportionment of liability and, it would seem to me that such an apportionment is necessary in this case to assess the extent of the liability which the plaintiff must assume pursuant to s. 35(1)(i); must be of small degree. Thus, I would assess the liability of the manager at 10% of the overall liability.
70. The Act of 1961 provides at s. 11 that “two or more persons are concurrent wrongdoers when both or all are wrongdoers and are responsible to … the injured person … for the same damage.” Specifically that can occur through vicarious liability of one for another, breach of joint duty, conspiracy, concerted action to a common end or independent acts causing the same damage” as per subsection (2)(a). The wrong may be “a tort, breach of contract or breach of trust, or any combination of them” as per subsection 2(b). Under s. 12, concurrent wrongdoers are “each liable for the whole of the damage in respect of which they are concurrent wrongdoers.” Liability may then be apportioned by a court “in such a manner as may be justified by the probabilities of the case”. The rules dealing with apportionment of damages are set out in section 14. Contributory negligence is defined in section 34. Damages are apportioned according to the degree of fault or, if this is not possible, equally.
71. Here a divergence occurs from the separate judgment of O’Donnell J. In dissenting on this point, it must be identified that the order of Ó Néill J is founded on a clear finding of fact that the controllers of the school were the Marist Brothers. That finding of fact is not to be disturbed. This is not a case where there can be two employers. With the passage of time, those with experience of being a parent will know that the dangers ignored or pretended out of existence have now been addressed by the ‘Stay Safe Program’ for empowering children to realise the inviolability of their own bodies. As was commented by May LJ in Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others, it is usual in most cases for it to be obvious who, in terms of a possibility of a worker having differing employers, was in charge of the work. As previously said in this judgment, cases where two groups of employers are responsible for the one person are necessarily rare. This is not one of the cases. The school manager was on the evidence rarely present in the school, had little to do with management and nothing to do with the day to day running of the school. Thus there is no basis for the application of contributory fault to the manager in this case. A division of 50% responsibility to the present and the absent defendants therefore does not arise. An employer was clearly identifiable from the evidence.
Damages and contribution
72. O’Donnell J reasons for the reduction in damages to €150,000 and that figure reflects the nature of the case and the limits placed elsewhere on general damages. On the analysis in this judgment diverging from the proposition that two employers are not identifiable in this case, that figure should not be reduced by 50%. Even if two employers were identifiable, fault should not automatically be 50/50 but on the basis of the contribution to the wrong. Here, on this analysis, it would be to the complete exclusion of the nominal employer, because in effect he had nothing to do with this. Thus liability would be 100%
Order
73. There is substantial concurrence, but a few important areas of disagreement, in this judgment with that of O’Donnell J. In order to clarify where the accord lies and where divergence should be identified, the following observations are made, for the sake of clarity, based on the reasoning herein:

1. The judgment of Ó Néill J in the High Court cannot be upheld on the basis he reasoned as to the liability of a religious order, as this makes an unincorporated association into what is in effect an incorporated entity with succession to liability no matter what change of membership, O’Donnell J and the majority of the Court concur;
2. Depending on the circumstances, those running a school or educational establishment may be liable when a teacher sexually assaults a child, O’Donnell J and the majority concur;

3. An unincorporated association can be liable in damages through it members and the members can be vicariously liable for actions done in the course of a task assigned by the members, including abuse during teaching, but that liability is of those for whom the task is done at that time and those who join a group after a tort is already committed cannot be liable, O’Donnell J and the majority concur;

4. Since an unincorporated association can have liability for the actions of its employees, the individual members of the Marist Brothers in Ireland as of 1972 are liable for sexual abuse perpetrated by one of their number while acting on their behalf as a teacher, O’Donnell J and the majority concur;

5. As to the liability of the members of this unincorporated group, Brother McGowan was not proved, and was not alleged in pleadings or in evidence, to have been a member of that order at that time when the abuse was committed and the burden of proof is on the plaintiff, and that fact should have been alleged in order to enable contrary evidence from Brother McGowan, fair procedures, but here there is neither pleading nor positive evidence to that effect, dissenting from O’Donnell J and the majority who would uphold the High Court judgment on the basis explained in his judgment;

6. Reduce damages to €150,000 in order to keep damages within a rational range in the context of the maximum available for the worst personal injury cases, concurring with O’Donnell J and the majority;

7. While in some instances of employment, there may be two employers, O’Donnell J and the majority concur, here, on this evidence, there is only one – namely the Marist Brothers, not the manager of the school, dissenting from O’Donnell J and the majority;

8. It follows that the amount of damages cannot be reduced under the Civil Liability Act, dissenting from O’Donnell J and the majority;

9. The head of the Marist Brothers in Ireland may be a corporation sole. If so, since in 1972 the head was part of the unincorporated group, his liability may continue, but this point is obiter as are any comments by O’Donnell J on this issue;

10. There should be a retrial in the High Court, but not as to the liability of those running a group of teachers, a religious order which is more than equivalent to an employment relationship, one of whom abuses a pupil, that is decided herein, nor as to the particular liability of the abuser, that is decided, nor as the liability of members of an unincorporated group or association one of whom abuses a child sexually in the course of duties assigned by the members, that liability is possible and is decided herein, but solely on the narrow point as to whether the legal personality or corporation sole is part of Irish law and whether it applies to Brother McGowan as successor to the head of the Marist Brothers in Ireland, O’Donnell J would uphold the judgment of the High Court on the narrow basis set out in his judgment from which, on that specific point, this judgment dissents;

11. Liability of a corporation sole and the position of the head of the Marist Brothers should be the only point retried in the High Court by way of evidence and legal argument, but there should be a retrial in respect of that, O’Donnell J and the majority would not order a retrial since his position is to uphold liability based on his contrary analysis on point 5.

Davin v. MacCormack.

[1932] IR 681
Meredith J.

 

MEREDITH J. :
14. Nov.

This is all application by a person not named as defendant in a summons for the recovery of land, and not served therewith, for leave to appear and defend. As he is unable to file an affidavit showing that he is in possession of the land either by himself or his tenant, the application had to be made under Order XVI, r. 11, and not under Order XII, r. 37.
The action is brought by a lessor against a lessee. The statement of claim has not yet been filed, but it appears from the affidavit of the plaintiff filed for the purpose of resisting this application that the plaintiff is bringing her action for the purpose of enforcing a forfeiture for breach of a covenant against assigning, sub-letting or parting with the possession of the premises without consent. The applicants are the Royal Bank of Ireland, Ltd., who are mere equitable mortgagees by deposit of the title deeds to the lease. The plaintiff alleges that the defendant has sub-let the premises without her consent, and that he has also contracted to sell them. The defendant informed the applicants of the proceedings and is quite willing that the applicants should be added as defendants, and there is not the least suggestion that the defendant does not intend to contest the plaintiff’s claim to the best of his ability. Also the applicant cannot say that the defendant has, owing to the amount of the applicants’ charge, no substantial interest in the premises.
The case was argued without reference to Order XII, r. 37, but I think that when the Court is asked to exercise a discretion under Order XVI, r. 11, the Court should take into consideration that the action is one for ejectment, and that for such actions there is a special set of rules, one of which provides for the case of persons not named being given leave to defend. The applicants in the present case have not the legal estate, are not in possession, and no collusion is suggested, and I do not see that their presence before the Court is “necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter.” From beginning to end the questions involved are to my mind entirely questions between the lessor and lessee. The case of Mills v. Griffiths (1) cited by Mr. Comyn is directly in point. Further, in an appropriate case, an equitable mortgagee could in proceedings by him against his mortgagor obtain leave to defend the ejectment proceedings in the name of the lessee. In an administration suit an equitable tenant for life obtained leave to defend ejectment proceedings brought against her trustee on indemnifying him against costs: Longbourne v. Fisher (2). In the present case the defendant desires to defend the action, and, if the applicants cannot secure against him the right to defend
in his name, I do not see any reason why the lessor should have to face an additional defendant, who is not in possession, and whose only claim is an equitable charge on what the defendant can succeed in holding and, I have no doubt, will do his best to hold.

 

 

 

Allied Irish Coal Supplies Ltd. v. Powell Duffryn International Fuels Ltd

. [1997] IESC 11; [1998] 2 IR 519

 

Murphy J

 

In the motion to join plc as an additional Defendant the Plaintiff relied on O 15 of the Rules of the Superior Courts which, so far as relevant, provides as follows:

 

13. No cause or matter shall be defeated by reason of the misjoinder or nonjoinder of parties, and the court may in every cause or matter deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. The court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the court to be just, order that the names of any parties improperly joined, whether as Plaintiffs or as Defendants, be struck out and that the names of any parties, whether Plaintiffs or Defendants, who ought to have been joined, or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added. No person shall be added as a Plaintiff suing without a next friend, or as the next friend of a Plaintiff under any disability, without his own consent in writing thereto. Every party whose name is so added as Defendant shall be served with a summons or notice in manner hereinafter mentioned, or in such other manner as the court may direct, and the proceeding as against such party shall be deemed to have begun only on the making of the order adding such party.

 

14. Any application to add or strike out or substitute a Plaintiff or Defendant may be made to the court at any time before trial by motion or at the trial of the action in a summary manner.

 

As the first sentence of r 13 indicates this provision was originally made to alleviate the hardship which was caused by the rigid application of what might now he described as ‘legal technicalities’. Whilst many of those problems were eliminated by the enactment of the Judicature Acts both here and in England, it has been held that the discretion conferred by r 13 should be exercised in those cases where, before the Judicature Acts, a plea of abatement would have succeeded (see Wilson Sons & Co v Balcarres Brook Steamship Co [1893] 1 QB 422). Furthermore the words ’cause or matter’ in the rule mean the action as it stands between the existing parties (see Amon v Raphael Tuck & Sons Ltd [1956] QB 357 at p 369). Certainly the court has jurisdiction to refuse to add parties for the purpose of introducing a new cause of action. In Raleigh v Goschen [1898] 1 Ch D 73, Romer J explained why — in that case at any rate — such a course should not be adopted although he was careful to indicate that the Plaintiffs would have whatever rights were available to them in other proceedings against the parties whom they had sought to add.

 

In the High Court the learned trial judge understandably inquired as to what amendments might be sought of the statement of claim as against the new Defendant. This Court was informed that it had been explained to Laffoy J that the only relief sought against plc was in the nature of a declaration. In this Court, in response to the same query, counsel for the appellant was in a position to hand in a draft of the amended statement of claim which it was proposed to deliver in the event of the application succeeding. The relief sought by the amendments as contained in that draft is as follows:

 

A declaration that the first and second named Defendants be treated as a single economic entity and that the Plaintiff in the event of this Honourable Court awarding damages to the Plaintiff that the same be recoverable from the first and or second named Defendant or in the alternative that the first named Defendant in relation to the matters the subject matter of these proceedings was acting directly or indirectly as the agent of the second named Defendant.

 

The allegation, implicit in that relief, that plc would be liable in contract or in tort as a result of the acts of its agents is clearly a new cause of action. But more than that it is one which arose, if at all, outside the time limited by the Statute of Limitations. It is a well established rule of practice that a court will not permit a person to be made a Defendant in an existing action at a time when he could rely on the Statute of Limitations as barring the Plaintiff from bringing a fresh action against him (see Liff v Peasley [1980] 1 WLR 781 and Ketterman v Hansel Properties Ltd [1987] AC 189). Accordingly the application in so far as it seeks to join plc for the purpose of maintaining an action against that company for breach of contract or fraudulent misrepresentation must be rejected.

 

In so far as the Plaintiff seeks to join the parent company to obtain the other declaratory relief different considerations may apply. That would not appear to be a cause of action between the appellant and the existing or proposed Defendants. Whether the wholly owned subsidiary or any of its associates are together with the parent company a single economic entity of such a nature or conducted in such a fashion as to render any one or more of those companies liable for the debts of another forms no part of the cause or action between the Plaintiff and the existing Defendant. That is an issue which might arise in the event of the Plaintiff attempting to execute a judgment against the present Defendant or a problem which could arise if successful proceedings by the Plaintiff ultimately resulted in the liquidation of PDIF. On the pleadings as drafted and the amendments as proposed the Plaintiff’s contractual and legal rights are asserted as against PDIF and refuted by that company. That is the issue and not a question as to what assets would be available to meet a judgment if and when obtained.

 

In my view it would be inappropriate for the court in the exercise of its discretion to add a Defendant to a cause or action solely for the purpose of enabling the Plaintiff to have a determination as to the extent of the assets which would be available to it in the event of it being successful in that cause or action. For that reason alone I believe that the application was rightly refused.

 

As considerable debate took place before Laffoy J and in this Court with regard to the relationship between PDIF and plc, I feel that I should comment on it.

 

The cornerstone of company law was put in place just 100 years ago by the decision of the House of Lords in Salomon v Salomon & Co [1897] AC 22. Not merely did that case decide that a company incorporated under the Companies Acts is a legal entity separate from its promoters or members but it was recognised that this was so even though the company was incorporated for that purpose and with the result that the distinction operated to the manifest detriment of those dealing with the company in the ordinary course of its business. It is sometimes helpful to recall (as Barrington J did in IPBS v Cauldwell [1981] ILRM 242) that in laying down this principle the House of Lords unanimously reversed the decision of the Court of Appeal — likewise unanimous — which had utterly condemned the conduct of Mr Salomon and his family for the way in which they had incorporated and operated the family enterprise. Had not the pertinacious Mr Salomon mounted his appeal — and that in forma pauperis — to the House of Lords, the nature of the relationship between a company and its promoters would have remained as it had been described by Lopes LJ in the Court of Appeal as ([1895] 2 Ch 323 at pp 340-341):

 

The incorporation of the company was perfect — the machinery by which it was formed was in every respect perfect, even, detail had been observed; but notwithstanding, the business was, in truth and in fact, the business of Aron Salomon; he had the beneficial interest in it: the company was a mere nominis umbra, under cover of which he carried on his business as before, securing himself against loss by a limited liability of L1 per share, all of which shares he practically possessed, and obtaining a priority over unsecured creditors of the company by the debentures of which he had constituted himself the holder. It would be lamentable if a scheme like this could not be defeated.

 

If we were to permit it to succeed, we should be authorising a perversion of the Joint Stock Companies Acts. We should be giving vitality to that which is a myth and a fiction. The transaction is a device to apply the machinery of the Joint Stock Companies Act to a state of things never contemplated by that Act — an ingenious device to obtain the protection of that Act in a way and for objects not authorised by that Act, and in my judgment in a way inconsistent with and opposed to its policy and provisions. It never was intended that the company to be constituted should consist of one substantial person and six mere dummies, the nominees of that person, without any real interest in the company. The Act contemplated the incorporation of seven independent bona fide members, who had a mind and a will of their own, and were not the mere puppets of an individual who, adopting the machinery of the Act, carried on his old business in the same way as before, when he was a sole trader. To legalise such a transaction would be a scandal.

 

There are some decisions of the courts, particularly in other jurisdictions, and much academic writing which would seem to advocate a restriction of the principles so clearly established by the House of Lords in the Salomon case and perhaps indicate a wish to resuscitate the views so trenchantly expressed by Lopes LJ. However I am in complete agreement with the comments made by the learned trial judge in the present case when she said:

 

While not expressing any general view on the scope of the principle on which the Plaintiff relies, in my view, it cannot be utilised to render the assets of a parent company available to meet the liabilities of a trading subsidiary to a party with whom it has traded. The proposition advanced by the Plaintiff seems to me to be so fundamentally at variance with the principle of separate corporate legal personality laid down in Salomon v Salomon & Co Ltd [1897] AC 22 and the concept of limited liability it is wholly unstateable.

 

Counsel for PDIF sought in argument in this Court and in the High Court to distinguish the facts of the present case and those in Power Supermarkets Ltd v Crumlin Investments Ltd High Court 1978 No 4539P (Costello J) 22 June 1981. There is little difficulty in making such a distinction. In that case Costello J drew attention to the fact that apart from its initiation, the company in respect of which it was proposed that the corporate veil should be pierced, had never held any board meeting. There had been no meeting of shareholders. The supermarket, the subject matter of the case, had been purchased without any approval of any meeting of the board of directors and no meeting thereof was ever held to make decisions on trading or commercial matters. In fact the stock sold by the company was purchased not by the directors as such but by a panel of the Dunnes Stores Group who apportioned liability for purchases to each trading company in the group to whom the goods were invoiced. In the instant case there was, as I have pointed out, a very substantial business carried on by the employees of PDIF who reported to monthly meetings of the board of that company. However, apart from the distinctions which may be drawn between this and other cases the crucial feature of the Power Supermarkets case is that Costello J did not purport to question the authority of Salomon v Salomon & Co Indeed no reference was made to that case in the course of his judgment nor, as far as I am aware, the argument on which it was based. Again it is clear from the judgment in Rex Pet Foods Ltd v Lamb Brothers (Ireland) Ltd High Court 1982 No 8937P (Costello J) 5 December 1985 that Costello J had not intended in the Crumlin Investments case to lay down any revolutionary principle of law.

 

Subsidiaries, whether wholly or partially owned or controlled by the parent, are a well established feature of our company law. The Companies Act 1963, s 155, defines or identifies a subsidiary company. Ss 150-154 deal with the circumstances in which companies may be required to produce not merely annual accounts in relation to their own affairs but ‘group accounts’ which are required to give ‘a true and fair view of the state of affairs and profit or loss of the company and the subsidiaries dealt with thereby as a whole’.

 

The fact that the activities of subsidiaries may be reflected in the accounts of the group show the extent to which the legislature recognised how companies trading in this way may require to be viewed as an economic entity but there is no question of that legislation making the assets of one company within the group liable for the debts of another. Such a consequence could operate very unjustly to persons dealing, as they would be entitled to do, with any member of the group as a separate legal entity.

 

Whilst it would be impossible to say that there are no circumstances in which the members of a company — whether corporate or individual — could not conduct or purport to conduct the business of a company in such a way as to render their assets liable to meet claims in respect of the business nominally carried on by the company, I believe that this would be an altogether exceptional state of affairs and difficult to reconcile with the seminal judgment in the Salomon case. Moreover if it were sought to make this case it would have to be presented in circumstances in which creditors having conflicting claims on the assets of the different companies involved would have an opportunity of being heard. Apart from the inherent difficulty in sustaining the case, it seems to me that the joinder of plc for the purpose of seeking the relief which it is proposed to claim could operate as an injustice not merely to the existing Defendant but also to creditors or other persons interested in the assets and activities of the intended Defendant.

 

For these reasons too I believe the learned trial judge was correct in refusing the application.

 

Two other matters were canvassed before this Court. First, it was contended that PDIF had no locus standi to resist the application to the addition of a new Defendant and secondly, as already indicated, the claim to introduce new evidence for the purposes of the appeal.

 

As to the issue of locus standi it should be noticed that r 14 of O 15 expressly provides that an application to add a Defendant must be made by a motion if not made at the trial itself. PDIF were accordingly properly served with the application herein and prima facie had a right to be heard in relation thereto. Indeed it was its rights rather than those of the intended Defendant which might have been prejudiced by the granting of the order sought. In general a Plaintiff may institute proceedings against any Defendants without seeking the permission of anyone. However the joinder of a Defendant in an existing action may well cause delay or add unnecessarily to the cost of the proceedings. The court undoubtedly has a discretion as to whether or not to order the addition of the new Defendant and, as the present case illustrates, the submissions of an existing Defendant may well be of assistance to the court in determining how such discretion should be exercised. I am satisfied that the requisite locus standi exists.

 

Finally in relation to the admission of additional evidence, the general principles on which this may be permitted were set out in Murphy v Minister for Defence [1991] 2 IR 161 and repeated more recently in Smyth v Tunney [1996] 1 ILRM 219 at p 229 as follows:

 

1. The evidence sought to be adduced must have been in existence at the time of the trial and must have been such that it could not have been obtained with reasonable diligence for use at the trial;

 

2. The evidence must be such that if given it would probably have an important influence on the result of the case, though it need not be decisive;

 

3. The evidence must be such as is presumably to be believed or, in other words, it must be apparently credible, though it need not be incontrovertible.

 

It is admitted in the present case that the evidence which is sought to be introduced was available at the time of the hearing before the learned trial judge. In my view it could have been obtained by the exercise of reasonable diligence. As the appellant was making the case that PDIF was controlled and managed otherwise than by the directors of that company it followed that detailed investigations would be — and indeed were — carried out into the official returns made by the companies concerned to the Companies Registration Office in the United Kingdom. In that context the material which is now sought to be introduced should have been available to it. Furthermore, I am fully satisfied that the information now available and the inferences which it is sought to draw from them would only have a marginal value in relation to the issue which it has sought to raise.

 

In the circumstances I would refuse liberty to introduce new evidence and I would dismiss the appeal.

 

BARRON J: I agree that this appeal should be dismissed and that liberty to introduce new evidence was properly refused. The Defendant is clearly a properly run separate legal entity.

 

Of course a subsidiary company may be dependent upon its parent company as regards control, finance and operations. But none of that prevents it from being a separate legal entity. The whole concept of limited liability is to enable some part of a person’s affairs to be placed in a separate compartment. What is important is that having decided to carry out a business transaction by way of a particular legal entity such transaction remains solely the legal and financial concern of that entity. There must for example be no suggestion that the benefit of a transaction will be taken by one company and the liabilities under the same transaction borne by another. It is legitimate for individual transactions to be carried out through a medium of a limited liability company. What is not legitimate is for the person in charge to pick and choose which companies shall obtain the benefit of a transaction only when that transaction has been completed or is under way.

 

 

Barlow v. Fanning [2002] IESC 53 (02 July 2002) Keane CJ

8. Professor Fanning was of the view that the plaintiffs had adopted this procedure in order to prevent him from defending his reputation and that it was designed to facilitate a settlement between the plaintiffs and the University in which he would not be consulted. An application was, accordingly, made on his behalf to the Master of the High Court pursuant to Order 15 Rule 13 for an order “rejoining” him as a defendant in the proceedings. The Master having refused to grant the order sought, an appeal against that refusal came before Johnson J who, in an extempore judgment, allowed the appeal. The learned High Court judge said:

“The vast majority of the allegations as pleaded in the statement of claim are made against [Professor] Fanning and in the circumstances, it seems to me that it is proper that he be rejoined to the proceedings. Applying the reasoning of Mr. Justice Lynch [in Fincoriz S.A.S. Di Bruno Tassin Din e C -v- Ansbacher & Co. Limited and Others, unreported, judgment delivered 20th March 1987], this seems to me to be a clear case where I should exercise my discretion to rejoin Professor Fanning to the proceedings or, in the alternative, to strike out the notice of discontinuance.

“Accordingly, I propose to allow the appeal and to make an order that either Professor Fanning be rejoined in the proceedings or that the notice of discontinuance would be struck out.”

9. Counsel for the plaintiffs having indicated that he would need to take instructions from his clients as to whether they would consent to striking out the notice of discontinuance, and that consent ultimately not having been forthcoming, the High Court ordered that Professor Fanning be rejoined in the proceedings and the notice of discontinuance “do stand struck out”.
10. From that judgment and order, the University have now appealed to this court. Although no notice of appeal has been served on behalf of the plaintiffs, they appeared on the hearing of the appeal and supported the position of the University.
11. Order 15, Rule 13 provides as follows:

“No cause or matter shall be defeated by reason of the misjoinder or non-joinder of parties and the court may in every cause or matter deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. The court may, at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the court to be just, order that the names of any parties improperly joined, whether as plaintiffs or as defendants, be struck out and that the names of any parties, whether plaintiffs or defendants, who ought to have been joined, or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all questions involved in the cause or matter be added….. Every party whose name is so added as defendant shall be served with a summons or notice in manner hereinafter mentioned, or such other manner as the court may direct, and the proceedings as against such party shall be deemed to have begun only on the making of the order adding such party.”

12. Neither the High Court nor this court were referred to any authority for the proposition that this rule authorises the High Court to join a party as a defendant to the proceedings in the face of opposition, not merely from the defendant/defendants to the proceedings, but also of the plaintiff. Nor was this court referred to any authority in support of the proposition that, where a plaintiff issues proceedings against more than one defendant and, for whatever reason, discontinues the proceedings against one of the defendants, the High Court may, on the application of that defendant, join him as a defendant in the proceedings, although the plaintiff has expressly abandoned any claim for relief against him and although the remaining parties to the proceedings, far from having sought his being joined, are opposed to his being joined and where the sole ground for joining him is that allegations or findings affecting his good name may be made in the course of the proceedings.
13. The absence of any authority in support of those propositions is not surprising. In Vandervell Trustees Limited -v- White and Ors. [1971] AC 912, Viscount Dilhorne said of the corresponding words in the English rule which were the same as ours:

“The many reported cases in which this rule has been considered were comprehensively reviewed by Devlin J (as he then was) in Amon -v- Raphael Tuck & Sons Limited [1956] 1KB 357. He said, at p.361:

‘There are two views about its scope; an authority can be cited for both. One is that it gives a wide power to the court to join any party which has a claim which relates to the subject matter of the action…. If that is right, it really kills any submission about jurisdiction. The court is hardly likely in the exercise of its discretion to join as a party somebody who has no claim relating to the subject matter of the action: and if its powers extend to joining anyone who has, the question whether the particular intervenor should be joined becomes virtually one of discretion.’

“In this case the Court of Appeal held that there should be a wide interpretation of the rule. Lord Denning said [1970] Ch 44, 56-57:

‘We will in this court give the rule a wide interpretation so as to enable any party to be joined wherever it is just and convenient to do so. It would be a disgrace to the law that there should be two parallel proceedings in which the self same issue was raised, leading to difficult and inconsistent results. It would be a disgrace in this very case if the special commissioners should come to one result and a judge in the chancery division should come to another result as to who was entitled to these dividends.’

“Whether this interpretation is wider than that stated by Devlin J in the passage cited above, it is not necessary to consider. My difficulty about accepting Lord Denning’s wide interpretation is that it appears to me wholly unrelated to the wording of the rule. I cannot construe the language of the rule as meaning that a party can be added whenever it is just or convenient to do so. That could have been simply stated if the rule was intended to mean that. However wide an interpretation is given, it must be an interpretation of the language used. The rule does not give power to add a party whenever it is just or convenient to do so. It gives power to do so only if he ought to be joined as a party or if his presence is necessary for the effectual and complete determination and adjudication upon all matters in dispute in the cause or matter. It is not suggested that the revenue ought to have been joined.”

14. The scope of the rule in England was subsequently widened by the addition of Order 15 Rule 62(b)(ii) which provides that a court may order to be added as a party to the proceedings

“(i) any person between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which in the opinion of the court it would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter.”

15. There has been no corresponding amendment to the Rules of the Superior Courts in this jurisdiction.
16. The law in England and Wales is stated as follows in Halsbury’s Laws of England (4th Edition) Vol. 37, para. 226 at p. 171:-

“The general rule of practice is that the plaintiff is entitled to choose the person or person as defendants against whom he wishes to pursue his claim for the relief or remedy he seeks, and that he cannot be compelled to proceed against other persons whom he has no desire to sue. Nevertheless the court has power to add a person who is not a party to the action as originally constituted as a defendant against the will of the plaintiff, either on the application of the defendant or of the non party. An application by any person to be added as a party must, except with the leave of the court, be supported by an affidavit showing his interest in the matters in dispute in the cause or matter or the question or issue to be determined as between him and any party to the cause or matter.

“A person having no legal but only a commercial interest in the outcome of the litigation between the plaintiff and the original defendant cannot be added as a party either for the convenience of the court or otherwise. On the other hand, a person may be added as a defendant, either on his own application or the application of the defendant, where his proprietary or pecuniary rights are or may be directly affected by the proceedings either legally or financially, by any order which may be made in the action, or where the intervenor may be rendered liable to satisfy any judgment either directly or indirectly.”

17. In Fincoriz S.A.S. Di Bruno Tassin Din e C -v Ansbacher & Co. Ltd., & Ors, the plaintiffs had brought the action in order to establish their rights in or title to a fund of some US$30 million which was lodged with the first named defendants in the name of the second named defendants who in turn were controlled by the third named defendants. The applicants before Lynch J had obtained an injunction in separate proceedings prohibiting the defendant from parting with or transferring the fund of US$30 million: a similar injunction had been obtained by another party against the defendants. The learned trial judge pointed out that, in the event of the plaintiffs succeeding in the action and obtaining an order for the payment to them of the fund, the defendants would be in an impossible position if the injunctions obtained against them by the applicants and the other party were still subsisting. The plaintiffs opposed the joining of those parties but the learned trial judge, while acknowledging that there must be exceptional circumstances before a person could be joined as a defendant against the wishes of the plaintiff, was satisfied that there were such exceptional circumstances in that case and ordered the applicants and the other party to be joined.
18. No exceptional circumstances of that kind exist in the present case: the plaintiff’s claim against Professor Fanning having been discontinued, it cannot be said, even on the most liberal construction of Order 15, Rule 13, that he ought to have been joined or that his presence is necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, the latter having unquestionably been the case in Fincoriz. It is no doubt the case that, if the plaintiffs succeed in the present action, the good name and reputation of Professor Fanning may be adversely affected, since, for the most part, the establishment of the plaintiff’s case against the University necessitates the proof by them of damaging allegations against Professor Fanning. However, that can often be the case in litigation where a party elects to sue one defendant in reliance on his vicarious liability for the wrongdoing of another who is not sued. Thus, the owner of a vehicle is frequently sued as being vicariously responsible for the negligence of a person driving the vehicle with his consent. If the submissions advanced on behalf of Professor Fanning were well founded, it would be necessary in every such case for the High Court, on the application of the driver, to join him as a defendant in the proceedings because his good name and reputation might be adversely affected by what was said during the course of the case or, indeed by the findings of the trial judge. I am satisfied that Order 15 Rule 13 cannot be so construed and that a person in the position of Professor Fanning cannot be regarded as a party who ought to have been joined or whose presence before the court is necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter.
19. I would allow the appeal and substitute for the order of the High Court an order dismissing the application.

 

B.V. Kennemerland Groep v. Montgomery [1999] IEHC 55; [2000] 1 ILRM 370 (10th December, 1999)

 

Judgment of Mr. Justice Geoghegan delivered the 10th day of December, 1999

 

1. This is an application by way of appeal from the Master of the High Court for an Order substituting Vriesveem “De Drie Haringen” B.V. as Plaintiff in substitution for B.V. Kennemerland Groep. The Defendants are a firm of solicitors who were engaged by a Dutch company to carry on Irish litigation. A sum of £25,000 was paid to the Defendants by their client. But there is a dispute as to whether that payment was for the purpose of discharging costs already owed or for the purposes of new intended litigation which never ensued. The Dutch client company was originally called Rederij Kennemerland B.V. and was a subsidiary of the presently named Plaintiff. The name of the client company was changed in 1994 to Maarten Ederveen IV B.V. (“Maarten”). Subsequently, Maarten merged with the company now sought to be substituted as Plaintiff and all assets and liabilities of Maarten became transferred to that company. The claim against the Defendants is that the money should be returned as it was intended for litigation which never occurred and it is suggested that it has been held by the Defendants in trust ever since. The Defendants not only dispute the purpose of the payment of the monies as I have already explained but claim that any action to recover them is long statute barred.

 

2. It is not seriously in dispute that the proceedings which were instituted on the 19th of September, 1997 were brought in the name of the wrong Plaintiff due to a bona fide error. As to how this error arose is fully explained in the Affidavit of Mr. Terry Leggett, Solicitor of Eugene F. Collins & Co. and particularly in paragraph 7 of his supplemental Affidavit sworn 1st October, 1998. It is perfectly clear that the Defendants would have at all material times known that the wrong company was the Plaintiff and furthermore they themselves in correspondence regularly used the name of the parent company i.e. the incorrect Plaintiff.

 

3. Order 15 Rule 2 of the Rules of the Superior Courts provides as follows:-

 

 

“Where an action has been commenced in the name of the wrong person as plaintiff, or where it is doubtful whether it has been commenced in the name of the right plaintiff, the Court may, if satisfied that it has been commenced through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff on such terms as may be just.”

 

4. I am absolutely satisfied that subject only to the problem of statute bar, justice requires that I make the substitutions sought. I am further satisfied that I am entitled to do this under Order 15 Rule 2 and that that is the appropriate rule in this instance rather than Rule 13.

 

5. The Defendants submit, however, that I ought not to substitute a new party under the rule if the action at the suit of that new party is statute barred. In this connection the Defendants particularly rely on the judgments of the Supreme Court in Allied Irish Coal Supplies -v- Powell Duffryn International Fuels Limited [1998] 2 I.L.R.M. 61. The first point to be made about that case is that it was dealing with an application to add a defendant under Order 15 r.13 of the rules of the Superior Courts and not under Order 15 r.2. Murphy J. in delivering the principal judgment of the Court said the following at p.69:

 

 

“It is a well established rule of practice that a Court will not permit a person to be made a defendant in an existing action at a time when he could rely on the Statute of Limitations as barring the plaintiff from bringing a fresh action against him.”

 

6. For reasons which I will elaborate on, I think that Murphy J. was referring to a case where the action was quite clearly and beyond argument statute barred. If that is not the case the decision in Allied Irish Coal -v- Powell Duffryn would appear to be in conflict with an earlier decision of the Supreme Court, namely, O’Reilly -v- Granville, [1971] I.R. 90. Shanley J. considered this problem in Southern Mineral Oil Ltd -v- Cooney, [1998] 2 I.L.R.M. 377. He observed at p.382 as follows:

 

 

“The attitude of the Supreme Court as expressed in 1971 by O’Dalaigh C.J. and Budd J. in O’Reilly -v- Granville (that the statute was a matter of defence and does not arise until pleaded), to applications to join parties to proceedings has changed somewhat as can be seen from the decision of the present Supreme Court in Allied Irish Coal Supplies Limited -v- Powell Duffryn International Fuels Limited, [1998] 2 I.L.R.M. 61.”

 

7. Shanley J. went on to conclude that he was bound to follow the later decision of the Supreme Court. However, I interpret him as meaning by that that if and insofar as there was a relevant conflict between the two decisions he would have to follow the later one. I of course would also accept that that would be so. But Shanley J. analysed O’Reilly -v- Granville and demonstrated that that was a case where there could have been answers to the plea of the statute. Indeed he goes on to quote Budd J. as stating the following:

 

 

“If it were apparent beyond doubt that the statute applied to this case, an application to add the proposed defendant as a party might very well be refused as being a futile operation; but that is not the position here”.

 

8. It is not therefore entirely clear to me that Shanley J. considered the two decisions irreconcilable. If he did, I would respectfully beg to differ. It would seem somewhat doubtful in the first instance as to whether O’Reilly -v- Granville was ever cited to the Supreme Court in Allied Irish Coal Supplies -v- Powell Duffryn International Fuels Limited because it seems surprising that there is no reference to that decision in the judgments of either Murphy J. or Barron J. But at any rate I think it highly unlikely that the Supreme Court in Allied Irish Coal would have been intending to overrule O’Reilly -v- Granville without actually saying so, particularly having regard to the detailed analytical judgments in that case. I think therefore that Allied Irish Coal Supplies -v- Powell Duffryn International Fuels Limited is simply a restatement of a long established principle that a Court will not add a defendant under Order 15 Rule 13 if the action is quite clearly statute barred. I do not think that it can be taken as authority for the proposition that if there is doubt as to whether a plea of the statute would be successful or not, the Court making the decision as to whether to join the additional party or not has to there and then decide the statute bar issue and accede to or refuse the application accordingly. But at any rate I do not think that the principles which apply in relation to an application under Order 15 r.13 necessarily apply equally to an application under Order 15 r.2. For instance, in the case of O’Reilly -v- Granville Walsh J. expressed a minority view that for Statute of Limitation purposes an added defendant would be deemed to have been sued at the date of issue of the proceedings. There may be arguments that that would be the correct view in relation to the substitution of a plaintiff under Order 15 r.2. But there are numerous issues in relation to statute bar in this case. There is the question of whether the action would at any rate have been statute barred even if the correct Plaintiff had been joined from the start. There may be issues as to whether the action would not have been statute barred had the correct Plaintiff been joined at the start but would be statute barred if the action by the substituted Plaintiff is deemed to commence from the date of any Order that I might make joining him. There are further arguments as Mr. O’Donnell pointed out as to whether at any rate there might be answers to the plea of the Statute of Limitations on the basis of an alleged express trust in relation to the monies or on the basis of concealment or on the basis of estoppel. In my view it is totally inappropriate unless I was bound to do so by authority to determine these matters at this stage. I am satisfied that I should make the Order sought and if and when the Defendants plead the Statute of Limitations the other issues can then be tried. In case there should be misunderstanding I would add that even in a case under Order 15 r.2, I would accept that the Court has a discretion to refuse to make the Order on the grounds that it would be futile in practice if the action would be statute barred beyond any doubt. But that is far from the case here. I will therefore make the Order under O.15 r.2 of the Superior Court Rules and set aside the Order of the Master.

 

 

 

Cagney -v- First Active Plc (Formerly First National Bldg Soc) [2007] IEHC 191

 

Charleton J

 

Alternative Facts

33. As a matter of probability, the court’s view is that Mr. Sheridan has had, since May of 1995, IR£100,000 of the plaintiff’s money. If that money had been invested at a reasonable rate of interest it would now be available. That money, with interest, may yet be repaid: but is there anything the court can do about it? In an appropriate case the court can apply O. 15, r. 13 of the Rules of the Superior Courts. This provides:-

“No cause or matter shall be defeated by reason of the misjoinder or non-joinder of parties, and the Court may in every cause or matter deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the names of any parties improperly joined, whether as plaintiffs or as defendants, be struck out and that the names of any parties, whether plaintiffs or defendants, who ought to have been joined, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added. No person shall be added as a plaintiff suing without a next friend, or as the next friend of a plaintiff under any disability, without his own consent in writing thereto. Every party whose name is so added as defendant shall be served with a summons or notice in manner hereinafter mentioned, or in such other manner as the Court may direct, and the proceeding as against such party shall be deemed to have begun only on the making of the order adding such party.”

34. The fundamental rule of pleading is that parties may not plead alternative facts, as opposed to inferences that might be drawn from primary facts. The duty of the court is to decide the questions before it. Those questions are put before the court by the parties alleging facts in pleadings. The question here was an allegation that the defendant building society had disobeyed the plaintiff’s instructions as to how to invest his money with them. I have found that the plaintiff never told the defendant building society, now a bank, to open an account for the entire of the money available to him in May of 1995, in the names of him and his two daughters. Instead, some money was invested in a joint account between him and one of his daughters and later, on the sale of shares, other monies were invested in an account in his name and that of his other daughter. Instead of including IR£100,000 of that money into one or other of those accounts he, instead, invested that by putting it into a friend’s business or businesses by instructing the building society to open an account in his friend’s name and over which he would have no control.
35. Can the court, as a matter of law, re-plead the plaintiff’s case for him? Counsel for the third party has argued that to do this would be both unfair and a breach of the fundamental rule that facts cannot be alleged in the alternative.
36. The defendant and the third party have come to court to deal with an allegation by the plaintiff that, in effect, a conversion, amounting to a fraud, was perpetrated on him by the bank acting in tandem with the third party. That never happened. The court is not entitled to choose a set of facts based on the evidence before it and then start to add alternative parties, or change the pleadings, so that the court can make what it might think is a satisfactory order. Instead, what O. 15, r. 13 allows is for the court to join parties and to dispose of the cause before it. The cause is only before it, however, on the basis of facts alleged. Here, the facts alleged by the plaintiff were completely different to the facts as have been eventually found by this court. Mr. Cagney is not entitled to come before the court and to say, on the one hand, that he has been subject to a conversion by the defendant, which failed to carry out his banking investment instructions while, at the same time, saying that if this is not true then Mr. Sheridan got his money through a business investment and has not paid it back. If Mr. Cagney had joined Mr. Sheridan as a defendant or as a co-defendant, and had pleaded that Mr. Sheridan had taken his money and not got it back, I would be now able to consider making an order based on the facts which I have found. Mr. Cagney has, instead, produced an unbelievable tale, which I reject, of underhand dealings by the defendant. I am obliged to find out the truth. I can make no order unless the facts I find are asserted by a plaintiff who seeks a remedy based on an account that he asserts is the truth.

 

 

Result

37. In the circumstances, I am dismissing the plaintiff’s case against the defendant. The defendant does not have, and never had on the basis of the facts alleged by it, any case against the third party. That case is dismissed as well. I will hear submissions as to costs.

 

 

Joseph Dowling and Mary Dowling v. Armour Pharmaceutical Co. Inc.

]1996] 2 I.L.R.M. 417

; Baxter Healthcare Corporation and; Miles Laboratories Inc.; Morris J

 

I now propose to deal with these three points.

1. It is submitted on behalf of Immuno that the joining of a third party in this case will inevitably result in delay and in the particular circumstances of this case, the court should not tolerate such delay. It is submitted that a separate and distinct case has to be made by the plaintiff against Immuno and this will involve notices for particulars, replies, defence, discovery and all the individual steps associated with the new action. The work done to date is of limited use as it relates to the other defendants. Counsel refers to that part of Flood J’s judgment when the matter was before him on an application seeking to have the courts in this jurisdiction decline jurisdiction and to have the case heard in the United States, when he said in Doe v. Armour Pharmaceutical Co. Inc. [1994] 3 IR 78 at p. 99:

This Court has power to ensure that that objective (the administration of substantial justice) will not be frustrated and that power will be used, should the occasion arise, with vigour and resolution. Life to all mankind is short but life to these plaintiffs is a great deal shorter and this certainly is a case where ‘justice delayed is justice denied’ .

Counsel submits that in these circumstances, the court should, in its discretion, decline to grant the relief which would be in conflict with the views expressed by Flood J and confirmed by Blayney J on appeal when he said:

The learned trial judge finished his judgment with a vigorous plea that these actions should now be prosecuted with the utmost expedition and I would heartily endorse that plea.

There are, however, two aspects of this case which, in my view, must be taken into consideration. In the first place, if Immuno remain in the case as a third party, then it may well be that the determination of the issue of contribution or indemnity as between Baxter and Immuno may travel at a slower pace and not be ready to proceed at the time when the plaintiffs’ case is ready to proceed against the existing defendants. This is no reason why the substantive case should not go ahead leaving for further consideration all issues between Baxter and Immuno. I accept that it would make for a more convenient trial if these issues could be decided at the same time. However, the fact that they cannot should not, in my opinion, deprive Baxter of this relief. The second and more significant matter is that I have been advised by counsel for the plaintiffs that they not only support this application but seek to have Immuno joined as a defendant. I do not accept the submission made by counsel for Immuno that the court has a function to consider the advices which the plaintiffs have received in contrasting the benefits in having Immuno as a party to these proceedings as against the disadvantages the delays involved. I have been informed by counsel for the plaintiffs that full consideration has been given to this aspect of the case by the plaintiffs’ solicitors and counsel and that the present application is made in the light of these considerations. Accepting, as I do, that this is so, I am of the view that the court does not have any supervisory role and I accordingly reject this first point.

2. The second point. This point is based upon s. 27(1)(b) of the Civil Liability Act 1961 which requires that the third party notice be served ‘as soon as is reasonably possible’ . Normally, a consideration of this point arises on the third party’s motion to set aside the order joining him as third party on the grounds that the defendant has failed to serve the third party notice as soon as reasonably possible. Delay may be found to arise between the order joining the third party as a third party and the service of the third party notice or it may arise in delay in bringing the application to the court for liberty to serve the third party notice. In this case, the delay is said to arise between the time prescribed by the Rules (O. 16, r.1(3) ) for the application for leave to issue the third party notice, namely 28 days from the time of delivery of the defence, which would have been May 1994, and the notice of motion which was 27 November 1995, i.e. , one year and six months.

In considering this lapse of time, counsel for Baxter, the moving party, submits that it was not possible for his client to move with greater expedition because it was only possible for them to make a judgment on the desirability of bringing in Immuno as a third party when replies to particulars were received from the plaintiffs. He says that these replies were furnished on what he describes as a ‘drip feed’ basis. Four replies to particulars were received and then only after an order of the court requiring the particulars to be delivered and these are dated respectively 15/08/94, 30/01/95, 14/03/95 and 24/05/95. He submits that it was only after the last of these particulars was received that it was possible to exercise a judgment on the desirability of bringing in Immuno as a third party and there was a lapse of no more than six months from that time to the bringing of the motion which he says constitutes a compliance with s. 27 .

The realities of this case are that Baxter could only benefit from bringing in Immuno as a third party if it could be established that the plaintiff in each case was treated with Immuno’s product. This information only became available as it was furnished by the plaintiffs. The plaintiffs themselves in their replies to particulars make it clear that they were only in receipt of this information on a piecemeal basis and were sending it on to Baxter as it became available. Accordingly, I am of the view that it was wholly reasonable for Baxter to withhold a decision whether to apply to join Immuno as a third party until after the whole picture, insofar as is possible, was made clear to it. On 24 May 1995, the plaintiffs furnished their ‘best effort’ particulars and, in my view, that was the point at which Baxter should be required to decide whether to bring in Immuno as a third party or not. I appreciate that in earlier particulars, the administration of the Immuno product was identified with some plaintiffs and it might be thought that in those isolated cases, it was appropriate that Baxter should have moved to join the third party. I do not accept this as being a reasonable approach. These 20 cases are considered as a unit and it was, in my view, entirely reasonable that Baxter deal with these 20 cases en bloc .

The courts have given consideration to s. 27(1)(b) of the Civil Liability Act 1961 on a number of occasions. In A. & P. (Ireland) Ltd v. Golden Vale Products Ltd High Court 1977 No. 5001 P, 7 December 1978 , McMahon J said that the purpose of requiring the third party notice to be served as soon as reasonably possible was ‘to put the contributor in as good position as is possible in relation to knowledge of the claim and opportunity of investigating it’ . However, a situation analogous to the present position is to be found in Gilmore v. Windle [1967] IR 323 when O’Keeffe J, as he then was, held that the fact that the defendants’ advisers were awaiting an authoritative decision on the right to bring such proceedings before bringing this application was reasonable grounds for the delay. I view the delay in gathering the particulars as occurred in the present cases as analogous to the delay that resulted in awaiting that authoritative decision.

In Board of Governors of St Laurence’s Hospital v. Staunton [1990] 2 IR 31 ; [1989] ILRM 877 Finlay CJ , at pp. 37/881 identifies the general policy of the Civil Liability Act 1961 as ‘seeking to have all claims determined at the same time’ and, therefore, counsel for Baxter submits that a court should be slow to prevent the service of a third party notice unless real prejudice will result to the proposed third party. I am not satisfied that any such prejudice arises in this case, nor am I satisfied that there was any undue or unreasonable delay on the part of the second named defendant and, accordingly, I do not accept this point.

3. The third point made by counsel for Immuno is that a claim for contribution or indemnity will not arise in this case since the claim being made by the plaintiffs against Baxter must either stand or fall separately and on its own merits. He has submitted that if Baxter’s product was contaminated and it is found to be liable to the plaintiffs, this does not establish that Immuno’s product was similarly contaminated nor does it give Baxter any right to contribution or indemnity. Therefore, it is submitted that the third party procedure is inappropriate.

In my view, the circumstances of this case are such that such a claim may arise. On the basis that it is established at the hearing that Baxter distributed contaminated product and that the plaintiffs were treated with this product and suffered injury, it would, in my view, be open to Baxter to seek to establish that not only its, but also Immuno’s, product was contaminated and that it was administered to the plaintiffs and that it caused injury. In the event of their successfully making this case, then it would appear that s. 11 of the Civil Liability Act 1961 would render them concurrent wrongdoers and as a concurrent wrongdoer, Baxter has the right under s. 27 of the Act to claim contribution by the service of a third party notice.

Accordingly, I do not accept this submission. I am accordingly satisfied that this would be an appropriate case in which to give the plaintiffs liberty to serve a third party notice.

I now pass to consider the application that the proposed third party, Immuno, be joined as a co-defendant. The plaintiffs move this application as a result of leave given to them by the order of this Court on 27 November 1995.

1. 16, r.1(2) provides that where a defendant applies for leave to join a third party, then it will be unnecessary for the plaintiff to attend at the hearing ‘unless the plaintiff wishes to add the third party as a defendant’ . Counsel for Immuno submits that the effect of this rule is to do no more than to provide circumstances which may limit the capacity of the plaintiff to obtain the costs of attending the motion. It does not give the plaintiff the right to make such an application at that time. This may well be so. However, counsel for the plaintiffs relies in addition on O. 15, r.13 which provides that:

The court may at any stage of proceedings, either upon or without the application of either party, and on such terms as may appear to the court to be just, order that the names of any parties improperly joined, whether as plaintiffs or defendants, be struck out and that the names of any parties, whether plaintiffs of defendants, who ought to have been joined, or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all questions involved in the cause or matter to be added ….

I consider that I should have regard to the particular circumstances in which this application comes before the court. This motion is being brought by the plaintiffs in this case pursuant to a leave given to them by the court on 27 November 1995. On that date, they adopted the approved procedure of attending at court at the hearing of Baxter’s motion for the purpose of asking that Immuno be joined as a co-defendant and in the ordinary way they had a legitimate expectation that their application would be dealt with on that basis. In the result, by reason of time constraints and the complexity of the case together with considerations of urgency, it has been found that the application has taken on a more formal nature. They in no way contributed to that situation. It would, in my view, be quite wrong to deny the plaintiffs the order now sought simply because the practice adopted for over 30 years may not be in conformity with the rules.

Accordingly, I propose to make the order sought which is that I will join the proposed third party as a co-defendant. I will direct that the summons issued on 8 October 1991 be renewed for the purpose of serving it on Immuno. I will allow it three weeks within which to enter an appearance and direct that an amended statement of claim be delivered with liberty to amend the defence in accordance with the time scales provided for in the Rules or such additional period as may be agreed between the parties. I do not propose to impose any of the terms sought by the third party.

 

Eircom v Esat

 

99

 

 

Fusco v O’Dea

 

31

GMcG v DW

 

60

 

Grace v Ireland & Anor

[2007] IEHC 90 (07 March 2007) Laffoy J

 

 

The authorities

In the context of his invocation of article 6 of the Convention, counsel for the plaintiff referred to four authorities of the European Court of Human Rights (ECHR). Article 6.1 of the Convention, insofar as it is relevant for present purposes, provides:

“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitle to a fair and public hearing within a reasonable time by an independent and partial tribunal established by law …”

The first of the authorities referred to by counsel for the plaintiff was Luordo v. Italy [2003] ECHR 372. Counsel stated that he was relying on this decision only for the purpose of illustrating that bankruptcy proceedings are civil proceedings for the purposes of the Convention. The basis on which article 6.1 was invoked in that case was that during the bankruptcy, which lasted for fourteen years and eight months, under the Italian Bankruptcy Code the bankrupt’s legal proceedings concerning disputes over property issues arising in respect of assets forming part of the bankrupt estate were to be taken or defended by the trustee in bankruptcy and the bankrupt was precluded from intervening in such proceedings save insofar as they concerned an allegation of criminal bankruptcy or if permitted by law. The ECHR held that there had been an infringement of Article 1 of Protocol No. 1, which secures the right to peaceful enjoyment of possessions (para. 71). In relation to the article 6.1 argument it found that the restrictions on the applicant’s ability to take legal proceedings concerned disputes or issues of a pecuniary nature, so that the civil limb of article 6 was applicable (para. 84). Having stated that the “right to a court” is not absolute, the ECHR stated as follows at paras. 86 and 87:

“86. The Court considers that the purpose of the restriction on the applicant’s capacity to take legal proceedings is to assign the role of representing the bankrupt in Court in respect of issues arising over the bankrupt’s pecuniary rights to the trustee in bankruptcy as, once the bankruptcy order has been lodged, he is responsible for the administration of the bankrupt’s assets. Indeed, it is self-evident in the Court’s view that disputes over such matters may have major repercussions on the assets and liabilities of the bankrupt estate. The Court consequently finds that the restriction is intended to protect the rights and interests of others, namely those of the bankrupt’s creditors. The court must go on to examine whether the consequences suffered by the applicant were proportionate to the legitimate aim pursued.

 

87. The restriction on the applicant’s right of access to a court is not in itself open to criticism. However, the risk with such a system is that it may unreasonably limit the right of access to a court, particularly if the proceedings are protracted as they were in the instant case in which they lasted fourteen years and eight months. In that connection, referring to its findings with respect to Article 1 of Protocol No. 1, the Court considers that, contrary to what the Government have affirmed, the delays in the proceedings were not attributable to the failure of the attempts to sell the applicant’s house at auction or to the applicant’s conduct.

 

Consequently, it finds that there was no justification for restricting the applicant’s right of access to a court for the full duration of the proceedings, since while in principle a restriction on the right to take legal proceedings is necessary to achieve the aim pursued, the necessity will diminish with the passage of time. In the court’s view, the length of the proceedings thus upset the balance that had to be struck between the general interest in securing the payment of the bankrupt’s creditors and the applicant’s personal interest in having access to a court. The interference with the applicant’s right was accordingly disproportionate to the aim pursued.”

Accordingly, the court held that there had been an infringement of the right of access to a court as guaranteed by article 6.1.

By contrast to the bankrupt in the Luordo case, after his adjudication the plaintiff was entitled to prosecute proceedings against Michael Cronin on foot of the assignment of the cause of action by the Official Assignee to him. He had the right under ss. 38 to 41 of the Act of 1988 to enter into a composition with his creditors and it is clear on the evidence that he contemplated that initiative, and he also had the right to invoke the discharge provisions contained in s. 85. Under the Act of 1988 he was the driver of all those initiatives, not the Official Assignee or any other organ or agent of the State.

The second authority relied on by counsel for the plaintiff was Tierce v. San Marino [2003] ECHR 304. The article 6.1 issue in that case was the applicant’s contention that the length of the proceedings seeking termination of her lease and an eviction order against her for non-payment of rent (from commencement in March, 1993 to the decision on her appeal in October, 2001) had infringed the reasonable time principle enshrined in article 6.1. The ECHR reiterated the jurisprudence on the reasonable time principle (at para. 30) as follows:

“The Court reiterates that the reasonableness of the length of proceedings must be assessed in the light of the circumstances of the case and having regard to the criteria laid down in its case law, in particular the complexity of the case, the conduct of the applicant and of the relevant authorities and what is at stake for the applicant in the litigation …”

The court concluded that the length of the proceedings, which lasted for approximately eight years and nine months, was mainly due to the complexity of San Marino litigation procedure. It found that there had been a violation of article 6.1.

The next decision relied on, Davies v. United Kingdom [2006] 2 B.C.L.C. 351, concerned disqualification proceedings brought by the Secretary of State for Trade and Industry against the director of a group of companies (the Blackspur Group), which had gone into liquidation owing an estimated £34 million. The proceedings were commenced in July, 1992 and terminated in January, 1998 on the basis of a settlement under which the applicant agreed to pay the Secretary of State’s costs. Having stated that the reasonableness of the length of proceedings is to be assessed in the light of the circumstances of the case, having regard in particular to its complexity and the conduct of the parties to the dispute and of the relevant authorities, the ECHR continued (at para. 26) as follows:

“In the present case the court must also bear in mind that, given that the applicant was a company director and that disqualification proceedings would have had considerable impact on his reputation and his ability to practise his profession, special diligence was called for in bringing the proceedings to an end expeditiously …”

On the facts, the court found that the United Kingdom was responsible for the greater part of the delay. It considered that the proceedings against the applicant were not pursued with the diligence required by article 6.1 and that there had been a violation of that provision, in that his civil rights and obligations were not determined within a reasonable time.

The fourth authority relied on by counsel for the plaintiff, Eastway v. United Kingdom [2006] 2 B.C.L.C. 361, concerned an application for disqualification of another director of the Blackspur Group. The ECHR applied its decision in the Davies case.

Counsel for the plaintiff did not cite any authority to support the plea that there has been an infringement of article 13 of the Convention, nor did he cite any authority in support of his contention that the section 85(4) is repugnant to the Constitution. However, the basis on which Article 40.3 was invoked was that it guarantees a right to a speedy trial in the same way as the Convention guarantees such right. In other words, the plaintiff did not develop that constitutional argument independently of the argument based on article 6.1 beyond the position taken in the reply to the notice for particular referred to earlier.

As the main focus of the plaintiff’s submissions was on the Convention and the jurisprudence of the ECHR, rather than on the Constitution, I propose considering the case made on incompatibility with the Convention first. There was no debate before the court as to whether it is appropriate for the court to consider Convention issues or constitutional issues first.

 

Non-retrospectivity of the Act of 2003

It was submitted on behalf of the defendants that the decision of the Supreme Court in Dublin Corporation v. Fennell [2005] 2 I.L.R.M. 288 makes it clear that the Act of 2003 is not retrospective and that no declaration of incompatibility may be granted in proceedings in respect of an act which took place prior to the coming into operation of that Act. The defendants’ contention that the court has been asked to apply the Act retrospectively is based on an analysis which points to the commencement of the bankruptcy process in 1990 and the plaintiff’s adjudication in 1991, from which the legal disabilities of which the plaintiff now complains flowed, as being the events by reference to which the court should assess whether the invocation by the plaintiff of the Act of 2003 has a retrospective or a prospective effect.

I have no doubt that, if the plaintiff in these proceedings was seeking to challenge the validity of his adjudication as a bankrupt in reliance on the provisions of the Convention and the Act of 2003, he would not be entitled to do so. That situation would be entirely analogous to the situation which arose in the Fennell case where, on an appeal to the Circuit Court against an order of the District Court granting Dublin City Council possession of premises on foot of a notice to quit served pursuant to s. 62 of the Housing Act, 1966, both the notice to quit and the order of the District Court having preceded the coming into operation of the Act of 2003, Mrs. Fennell sought to invoke the provisions of the Act of 2003 and, in particular, ss. 2 and 3 thereof. Kearns J., with whom the other judges of the Supreme Court agreed, having examined the texts and authorities on the issue of retrospectivity of statutes, concluded (at p. 318) that the Act of 2003 cannot be seen as having retrospective effect or as affecting past events. He also concluded that, although the appeal to the Circuit Court was prospective in the sense that it still had to be heard, the provisions of the Act of 2003 could not be invoked on the hearing of the appeal, stating as follows at p. 319:

“The parties’ legal rights and obligations were, in my view, fixed and determined once the wheel was set in motion by the service of a notice to quit, an act which triggered the provisions, requirements and consequences of s. 62 of the Housing Act, 1966. That is the moment when the invocation of legal rights determined the applicable law and the position of the parties. The requirement to protect the respective positions of the parties thereafter is all the greater in a situation where vested rights are involved and where changes proposed by the 2003 Act are agreed to be substantive rather than procedural.”

The position here, however, is that the plaintiff is not challenging his adjudication. What he is challenging is the requirement in s. 85(4) of the Act of 1988 that his discharge from bankruptcy is dependent on provision having been made for the payment of the expenses, fees and costs during the bankruptcy, as well as the preferential payments as it currently applies to him. It is in respect of that requirement, as it impacts on him at this point in time, that he seeks a declaration of incompatibility with the State’s obligations under the Convention pursuant to s. 5 of the Act of 2003.

Section 5 was not in issue in the Fennell case. In determining whether, if the plaintiff was entitled to a declaration of incompatibility, the declaration would have retroactive effect, it is necessary to consider the effect of such a declaration. Sub-section (2) of s. 5 provides that a declaration of incompatibility shall not affect the validity, continuing operation or enforcement of the relevant statutory provision, nor does it preclude the making of representations in proceedings before the ECHR. Sub-section (3) provides that the Taoiseach shall cause a copy of any order containing a declaration of incompatibility to be laid before each House of the Oireachtas within the time span stipulated. Sub-sections (4) and (5) provide for the payment of ex gratia compensation to a party to the proceedings in which the declaration is made in respect of injury or loss or damage suffered by him or her as a result of the incompatibility.

If the plaintiff could establish that the impugned requirement in s. 85(4) is incompatible with the State’s obligation under the Convention, the declaration would only operate prospectively to require the Taoiseach to comply with sub-s. (3) of s. 5 and to entitle the plaintiff to pursue a claim for an ex gratia payment of compensation under sub-ss. (4) and (5). The declaration would not affect any legal rights and obligations of the plaintiff or any other party. For instance, the declaration would not disentitle the Official Assignee to the payment of the expenses, fees and costs due in the bankruptcy, nor would it disentitle the Revenue Commissioners to the preferential payments due. Accordingly, in my view, the making of a declaration of incompatibility would not have a retroactive effect and the plaintiff is not barred from pursuing it.

 

The claim for a declaration of incompatibility

The plaintiff’s claim for a declaration of incompatibility in reliance on article 6.1 of the Convention is utterly misconceived.

The plaintiff’s case is not that his “right to a court”, in the sense in which that expression was used by the ECHR in the Luordo case, has been infringed. His case is that the continuance of the bankruptcy proceedings, and his status as a bankrupt, infringes the reasonable time principle enshrined in article 6.1, to use the terminology which the ECHR used in the Tierce case. The State’s obligation in relation to the reasonable time principle is to ensure that the civil process is brought to a conclusion by a judgment within a reasonable time. The State’s obligation is explained in the following passage from Jacobs and White on The European Convention on Human Rights (Oxford University Press), 4th Edition, commencing at p. 187:

“The object of the provision in article 6(1) is to protect the individual concerned from living too long under the stress of uncertainty and, more generally, to ensure that justice is administered without delays which might jeopardise its effectiveness and credibility.

 

In civil cases there is usually no problem in deciding when the period to be taken into consideration commenced: this is usually the date on which proceedings were initiated, for example by the issuing of a summons or writ. … The period to be taken into consideration lasts until the final determination of the case, and therefore includes appeal or cassation proceedings, proceedings to assess damages or sentence, and enforcement proceedings. The State can be held responsible only for delays which are attributable to it; if the parties to the litigation or the defendant in a criminal case have caused or contributed to the delay, those periods are not taken into account.

 

The reasonableness of the length of proceedings is assessed in the light of all the circumstances of the case, having regard in particular to the complexity of the issues before the national courts, the conduct of the parties to the dispute and of the relevant authorities, and what was at stake for the applicant.”

The plaintiff’s case is not that the bankruptcy process has been unduly protracted because of dilatoriness on the part of organs or agents of the State, for example, this Court, the Official Assignee, the Revenue Commissioners in proving their claim and so forth. The plaintiff’s case is that on the expiration of twelve years from adjudication a bankrupt should be discharged from bankruptcy without being required to pay the expenses, fees and costs of the bankruptcy and the preferential payments. Such a case, which involves substantial interference with the rights of third parties, is not a case which can be advanced on the basis of the reasonable time principle enshrined in article 6.1.

It may be that, because of the requirement to discharge expenses and preferential payments as a precondition to being discharged from bankruptcy, the plaintiff has no prospect of being discharged and will remain a bankrupt for the remainder of his life unless, as counsel for the plaintiff put it, he wins the lottery. However, that circumstance does not render the requirement contained in s. 85(4) incompatible with article 6.1 of the Convention.

Although the plaintiff invoked article 13 of the Convention, no case was advanced on the basis of article 13.

 

Locus Standi

The rule in relation to locus standi in challenging the constitutionality of a statutory provision was summarised by Henchy J. in his judgment in Cahill v. Sutton [1980] I.R. 269 (at p. 286) as follows:

“The primary rule as to standing in constitutional matters is that the person challenging the constitutionality of the statute, or some other person for whom he is deemed by the court to be entitled to speak, must be able to assert that, because of the alleged unconstitutionality, his or that other person’s interests have been adversely affected, or stand in real or imminent danger of being adversely affected, by the operation of the statute.”

Applying that test, the Supreme Court held that the plaintiff, Ms. Cahill, was disentitled to raise the allegation of unconstitutionality of s. 11(2)(b) of the Statute of Limitations, 1957, which provides that an action claiming damages for breach of contractual duty, in which the damages claimed consist of or include damages for personal injuries, shall not be brought after the expiration of three years from the date of accrual of the cause of the action. The breach of contract alleged by Ms. Cahill occurred in March, 1968. Her proceedings commenced on 11th April, 1972, outside the limitation period. The basis of her contention that s. 11(2)(b) was invalid having regard to the provisions of the Constitution was the absence of any saver to the time bar which would be applicable to a situation where the would-be plaintiff did not know, and could not possibly have known, of the accrual of the right of action within the permitted period (cf. judgment of O’Higgins C.J. at p. 276). However, the factual position was that Ms. Cahill became aware of the breach of contract in 1968. On the basis of those facts Henchy J. stated (at p. 286):

“Even if the Act of 1957 contained the saving clause whose absence is said to amount to an unconstitutionality, she would still be barred by the statute from suing. So the alleged unconstitutionality cannot affect her adversely, nor can it affect anybody whose alter ego or surrogate she could be said to be. As to such other persons, although the statute was passed in 1957, the plaintiff is unable to instance any person who has been precluded from suing for damages because of the absence from the statute of the saving clause for which she contends. Therefore, her case has the insubstantiality of a pure hypothesis. While it is true that she herself would benefit, in a tangential or oblique way, from a declaration of unconstitutionality, in that the consequential statutory vacuum would enable her to sue, that is an immaterial consideration in view of her failure to meet the threshold qualification of being in a position to argue, personally or vicariously, a live issue of prejudice in the sense indicated.”

In applying the primary rule as to locus standi, as enunciated by Henchy J. in Cahill v. Sutton, to this case the question which arises is whether the plaintiff can assert that his interest has been adversely affected by the requirement in s. 85(4) that provision be made for the expenses, fees and costs during the bankruptcy, as well as preferential payments, before his entitlement to a discharge arises on the basis that the bankruptcy has subsisted for twelve years. It seems to me that the answer to that question depends upon whether he has established that, if that requirement were excised, he would be entitled to a discharge. While the plaintiff’s bankruptcy has subsisted for in excess of twelve years, there are other conditions to be complied with before an entitlement to a discharge would arise. I have already adverted to the fact that one condition, the precondition that the plaintiff’s estate has been fully realised, is of relevance in the context of mootness. I consider that, irrespective of the views of the parties that the conduct of the Official Assignee in prosecuting the proceedings to set aside the transfer by the plaintiff of his house and farm to Mrs. Grace and his daughter is irrelevant, the pendency of those proceedings is of relevance to the issue of the plaintiff’s locus standi, because their mere existence, prima facie, excludes the conclusion that the plaintiff’s estate has been fully realised. The plaintiff, on whom the burden of showing that he has standing rests, has not discharged the onus of establishing that a precondition to his entitlement to a discharge has arisen. Therefore, to adopt the words of Henchy J. in Cahill v. Sutton, his case “has the insubstantiality of a pure hypothesis”.

As well as relying on the rule as to locus standi as enunciated in Cahill v. Sutton, the defendants also submitted that the plaintiff lacks standing to challenge the constitutionality of s. 85(4) because he has not pursued all avenues open to him to secure his discharge from bankruptcy, by analogy to the position adopted by O’Hanlon J. in E. v. E. [1982] I.L.R.M. 497 and the implicit acceptance of the principle of exhaustion of other remedies by Barrington J. in Brennan v. Attorney General [1983] I.L.R.M. 449. In my view, there is substance in that submission. The proceeds of the two actions which the plaintiff settled could have been utilised in an attempt to procure a composition with his creditors. The Official Assignee’s proceedings to set aside the transfer of the house and farm could have been pressed with a view to procuring a discharge under s. 85(4) and to this end he could have sought the assistance of the court pursuant to s. 61(7) of the Act of 1988. Against that background, the plaintiff’s constitutional challenge, viewed objectively, seems to be particularly unmeritorious. If this Court were to entertain the plaintiff’s challenge, thereby allowing the plaintiff to by-pass remedies available under the Act of 1988 to enable a bankrupt to procure his discharge, I have no doubt that, to adopt the words of O’Higgins C.J. in Cahill v. Sutton (at p. 277) “it would result in a jurisdiction which ought to be prized as the citizen’s shield and protection becoming debased and devalued”.

It was also submitted on behalf of the defendants that, insofar as the plaintiff seeks to rely on particular legal consequences flowing from bankruptcy, such as his inability to set up a building society or stand for election to the European Parliament, the plaintiff has not established any evidential basis that these restrictions have a detrimental impact on his personal situation. That is so, as far as it goes. However, it is peripheral to the core issue on standing, which is whether the requirement in s. 85(4) of payment of the expenses and preferential debts constitutes a live issue of prejudice to the plaintiff’s interest. As I have found, it does not because, absent such requirement, as things stand the plaintiff could not procure his discharge.

For the foregoing reasons, I have come to the conclusion that the plaintiff does not have locus standi to challenge the constitutionality of s. 85(4).

Even if he had locus standi, I consider that the plaintiff’s invocation of Article 40.3 and his contention that the impugned statutory provision is an infringement of an implied requirement that legal proceedings be prosecuted and brought to a conclusion in a reasonably expeditious manner is as misconceived as his case founded on article 6.1 of the Convention.

 

Inequality

As I understand it, the inequality contended for on behalf of the plaintiff was inequality between the position of an undischarged bankrupt, who may be consigned to a perpetual state of bankruptcy because of inability to pay a preferential claim of the Revenue Commissioners, and the position of the Revenue Commissioners the payment of whose preferential debt is necessary to procure a discharge from bankruptcy, which was characterised as exceptional discrimination in their favour. The comment made on behalf of the defendants on that argument was that it appears to involve no more than an assertion of disequilibrium as between the individual citizen and the revenue authorities, which is not in any way constructed into or related to any legal claim of infringement of the equality guarantee contained in the Constitution. In my view, that comment is justified. The plaintiff’s argument, which I must emphasise is wholly unconnected to the plaintiff’s case as pleaded, does not advance the plaintiff’s constitutional challenge or his assertion of incompatibility with the Convention.

In the circumstances it is neither necessary nor appropriate to express any view on the submission made on behalf of the defendants that the question whether a bankrupt who has failed to discharge certain debts and expenses should be released from the status of bankrupt after a particular period is a matter of policy for the Oireachtas and the policy should not be second-guessed by the courts.

 

Order

There will be an order dismissing the plaintiff’s claim.

 

Judge Mahon & Ors -v- Lawlor & Ors

[2008] IEHC 284 (30 July 2008)  Laffoy J

Administrator ad litem

As I have stated, representation has not been raised to the estate of Mr. Lawlor. His brother, Noel Lawlor, agreed to act as administrator ad litem for the purposes of the hearing of the preliminary issue. With the consent of the plaintiffs and Mrs. Lawlor, I made an order pursuant to Order 15, Rule 37 of the Rules of the Superior Court, 1986, appointing Noel Lawlor to represent the estate of Mr. Lawlor for the purposes of the preliminary issue. Noel Lawlor appeared at the hearing of the preliminary issue and he was represented by a solicitor. However, no submissions were made on behalf of the estate of Mr. Lawlor.

 

 

 

Amantiss Enterprises Ltd. Re

[1999] IEHC 74; [2000] 2 ILRM 177

 

 

JUDGMENT of Mr Justice O’Neill delivered the 21st day of December, 1999.

1. In the former of the above mentioned proceedings the Petitioner prays the following relief

 

(a) That the name of the company be restored to the Register pursuant to the provisions of Section 12(6) of the Companies (Amendment) Act, 1992.

(b) Such directions of provisions as may seem just for placing the company and all persons in the same position as nearly as may be as if the name of the company had not been struck off.

(c) Or that such other Order may be made in the premises as this Honourable Court may seem fit.

 

2. In the latter of the above mentioned proceedings the seventh named Defendant Kilsaran Concrete Products Limited (hereinafter referred to as Kilsaran) by a Notice of Motion dated the 27th day of July, 1999 seek the following reliefs:

 

 

1. An Order pursuant to Order 15 Rule 13 of the Rules of the Superior Courts striking out the name of the second named Plaintiff from the proceedings herein.
2. An Order pursuant to Order 19 Rule 27 of the Rules of the Superior Courts striking out those portions of the Plenary Summons and Statement of Claim delivered herein as relate to the purported claims of the second named Plaintiff on the ground that same are unnecessary or scandalous or intended to prejudice, embarrass or delay the fair trial of the action.
3. Further and in the alternative an Order pursuant to Order 19 Rule 28 of the Rules of the Superior Courts striking out those portions of the Plenary Summons and Statements of Claim delivered herein as relate to the purported claims of the second named Plaintiff on the ground that the same disclose no reasonable cause of action and/or are frivolous or vexatious.
4. Further and in the alternative, an Order pursuant to the inherent jurisdiction of this Honourable Court striking out those portions of the Plenary Summons and Statements of Claim as relate to the purported claims of the second named Plaintiff on the ground that same disclosed no reasonable cause of action and/or are frivolous or vexatious.
5. Further and other relief.
6. Costs.

 

……

31. In my view the plain and very reasonable and sensible intendment of subsection (6) of Section 12 is to preserve the validity of transactions entered into during a period of dissolution where frequently that dissolution is unknown to either the company and its officers or third parties dealing with it, and who conduct their business with each other and enter into engagements with each other on the basis that the company enjoys lawful existence. To remove legal validity from all of these transactions in circumstances where the parties to them at the time of their making intended them to have legal validity would in a great many instances work injustices and would provide the unscrupulous with much opportunity for mischief. I have no doubt that the legislature, in selecting the very clear language used in subsection (6) of Section 12, intended that such unfortunate consequences would not occur by reason of an unintended dissolution where no orderly process of winding up had taken place.

 

32. I tend to be reinforced in that conclusion by a consideration of the alternative proposition namely that for validity to accrue to transactions which took place during dissolution a specific order or direction would be required under the latter part of subsection (6). In most cases of companies who were struck off the register under Section 12(3) that would necessitate a host of parties having to be heard on an application such as the present one to restore the name of a company to the register or alternatively would lead to much separate litigation in order to determine the validity of all such transactions.

 

33. This problem was alluded to by Evershed M.R. at page 111 of the report where he says:-

 

“If on the power contained in the final words of the subsection in question to insert special directions in the order of resuscitation depended on the validation of all the multifarious engagements into which the dissolved company might have entered during the period of its statutory suspense (a period which might have lasted for twenty years), what will be the appropriate procedure? Prima facie, all of the third parties concerned would have to be given an opportunity to make representations to the Court, a proceeding which I find it well nigh impossible to contemplate.”

 

34. Evershed M.R. then went on to consider what meaning must be given to the final words of the subsection. He resolves that problem with these words;

 

“In my judgment the final words of this subsection can properly and usefully regarded as intended to give to the Court, where justice requires and the general words would or might not themselves suffice, the power to put both company and third parties in the same position as they would have occupied in such cases if the dissolution of the company had not intervened. More generally the final words of this section seem to me designed, not by way of exposition, to qualify the generality of that which precedes them, but rather as a complement to the general words so as to enable the Court (consistently with justice) to achieve to the fullest extent the “as you were position” which, according to the ordinary sense of those general words is prima facie, and their consequence”.

 

35. With this analysis of the final part of subsection (6) I respectfully agree.

 

36. Its conclusion is reinforced by a consideration of the meaning and effect of the words “and the Court may by order” which leads into the final part of subsection (6). It is clear in my view that in adopting this phrase the legislature did not intend that the retroactive effect of the preceding part of subsection (6) would be limited by the power to give direction. The use of the word “may” making it clear that the exercise of such power is essentially surplus to the existence of retroactive validation. Here I cite with approval the following passage from the judgment of Hodson L.J. in the Tyman case where he says as follows:-

 

 

“For my part I think the words of Section 353(6) are clearly designed to produce an “as you were” position and think that the latter part of the subsection is complementary and intended to provide for cases where provision is necessary in order to clarify an obscure position or give back to the company an opportunity which it might otherwise have lost. An example of this would be a case where a company had lost an opportunity of obtaining a concession or renewing a lease during the interval between its dissolution and an order under the subsection. A provision in the order could deal with such a case. That the last four lines of the section do not cut down the retroactive effect of that which precedes them is, to my mind, indicated by the introductory words “and the Court may by the order”. The directions and provisions to be made by the Order would naturally be supposed to make good what had previously been stated, namely that the company should be deemed to have continued in existence as if the name had not been struck off.”

 

37. In reaching an understanding of subsection (6) of Section 12 some assistance is to be obtained by looking at the different language used in Section 310 of the Companies Act, 1963 which deals with the situation where a dissolution occurs following a winding up in a voluntary liquidation, or a Court liquidation. Necessarily in these circumstances there will be no question of the company having, since dissolution, conducted trading or business operations. If acts were done in the name of the company following dissolution in these circumstances it is hard to imagine how they could have a lawful character and hence, as a matter of principle, retroactive validation could not ensue automatically on a declaration under Section 310, that the dissolution was void. The use of the phrase in Section 310:-

 

“And thereupon such proceedings may be taken as might have been taken if the company had not been dissolved” would seem intended to have the effect of enabling from that point, namely when the declaration is made, the company to sue or be sued.

38. Section 223 of the English Companies Act, 1908 which was replaced by Section 352 subsection (1) of the English Companies Act of 1948 and in turn was replaced by Section 651 of the English Companies of 1985 was so construed by a majority decision of the House of Lords in the case of Morris -v- Harris [1927] A.C. 252.

 

39. As mentioned earlier in this judgment, Counsel for all of the Notice Parties in the petition and Defendants in the proceedings relied upon the decision of the Court of Appeal in British Columbia, Canada in the case of Natural Nectar Products Canada Limited (Plaintiff) (Respondent) and Michael Theodor (Defendant) (Appellant) which judgment was given on June 6th , 1990. Here the Court was concerned with the interpretation of Sections 286 and 287 of the Companies Act of the relevant jurisdiction. In my opinion these two sections of that Companies Act seem to me to amalgamate and combine what is contained separately in Section 12(6) of the Companies (Amendment) Act, 1982 and Section 310 of the Companies Act, 1963. That being so, I do not find this decision in its reliance upon the judgment of Jenkins L.J. in the Tymans case of assistance in construing the meaning and effect of Section 12(6).

 

40. Mr McCann on behalf of Kilsaran cited a passage from the judgment of Judge Paul Baker Q.C. sitting as a judge of the High Court of In Re Townreach Limited at page 41 of the report. In this case there is the unusual circumstance of an application being made by the Secretary of State for an order under Section 651 of the English Companies Act, 1985 in circumstances where a company had been struck off the register under Section 653. The learned judge took the view that the term “dissolution” used in Section 651 was broad enough to encompass a dissolution resulting from a strike off the register under Section 653. Having permitted the application to be brought under Section 651 the learned judge then proceeded to consider amongst other cases that of Tymans Limited -v- Craven and in particular the dissenting judgment of Jenkins L.J. I prefer the reasoning of the majority judgments in that case and hence I can find nothing that is persuasive in the judgment in this case.

 

41. In summary therefore, I have come to the conclusion that an order restoring a company to the register under Section 12(6) of the Companies (Amendment) Act, 1982 has the automatic effect of rendering valid in law all acts done by or on behalf of the company or in its name during the period from its dissolution until restoration to the register. Having reached that conclusion it is not necessary for me to make any ancillary or specific orders in order to validate either the institution of the Plenary proceedings or the appointment of the Liquidator.

 

42. Having reached this conclusion I must now consider the submissions made by all the Notice Parties to the petition to the effect that it would not be just that the company be restored to the register.

 

43. These submissions stressed the following factors:-

 

 

1. That there was no automatic right to restoration.
2. That the Petitioner must show good reasons why he should be restored and must excuse those reasons which resulted in the striking off.
3. That the company had displayed a nonchalant attitude to the statutory requirements as contained in the Companies Act and in regard to the conduct of the High Court Plenary litigation.
4. That no annual returns had been filed in the Companies Office from 1989 onwards.
5. That when the Liquidator was appointed the company had already been struck off for some significant time.
6. That the Liquidator had failed to deliver notice of his appointment to the Registrar as required by Section 278 of the Companies Act, 1963 and failed to make any returns of any description thereafter.
7. That there was no explanation offered good, bad or indifferent on affidavit or otherwise in these proceedings by the Liquidator of his failures to have complied with his obligations under the Companies Act.
8. That there was no explanation of any description on affidavit, or otherwise of how the extraordinary situation occurred in the first instance and continued, that the Liquidator failed to become unaware of and remained unaware of the fact that the company had been struck off on the 19th May, 1993.
9. That there had been no adequate or convincing explanation by the Petitioner of how he was unaware and remained unaware of the fact that the company had been struck off the register.
10. That there was no explanation proffered from the Solicitor who acted for the Plaintiffs in the Plenary proceedings as to how he was unaware of the fact that the company had been struck off.
11. That the approach adopted by the Petitioner and his brother in these proceedings was somewhat casual and some of the content of the first affidavit sworn by the Petitioner had to be corrected in a second affidavit on the basis that some of the language used in the first affidavit was “loose use of language”.
12. That the returns which have now been made available for filing in the Companies Office are wholly inadequate, in that the Accountant’s report attached to the same is so heavily qualified that the exercise conducted here is no more than a superficial attempt to provide minimal compliance with statutory requirement.
13. That the Defendants in the Plenary proceedings ought not to have been sued by an entity not then in existence and were thereby prejudiced.
14. That in restoring a company to the register with retrospective validation for all acts done in the period of dissolution, that the Defendants are now being deprived of the benefit of what would be a defence under the Statute of Limitations if the company was compelled to initiate proceedings afresh against the Defendants following restoration.

 

44. I am satisfied from the affidavits that were filed on behalf of the Petitioner that the striking off of the company occurred unbeknownst to the Petitioner and that this fact did not become known to them until August of 1999. I am also satisfied, and indeed in this regard there are numerous admissions in the affidavits filed on behalf of the Petitioner and to which attention is drawn in the affidavit of James Nolan, that there was a great deal of casualness, carelessness and indeed downright dereliction of duty resulting in failure to comply with the provisions of the Companies Act, 1963 all of which resulted in the striking off of the company on the 19th May, 1993. I am satisfied that the fact that this situation continued unbeknownst to the Petitioner and apparently the Liquidator was equally the result of a high degree of carelessness and further dereliction of duty.

 

45. However, such default as there was, and in this regard I accept Mr Shipsey’s submission was default as against the Registrar of Companies and not specifically against the Notice Parties. I am not satisfied that the Notice Parties had been able to point to any specific prejudice that they have suffered as a result of the striking off. I do not accept that the institution of proceedings against them at the time was a specific prejudice having regard to my conclusions as to the meaning and effect of Section 12 subsection (6). I am mindful of the fact that to refuse the reliefs sought in the petition would have the effect of determining the Plenary proceedings insofar as Amantiss is concerned and I do not believe that I should exercise my discretion in that way at the behest of those parties who would gain the advantage from such determination.

 

46. Finally, I am impressed by the fact that Counsel for the Registrar has no objection to the relief being sought in the petition being granted, having regard to the uniqueness of the Registrar’s position in assessing compliance with the relevant statutory requirement.

 

47. For these reasons, I am disposed to grant the relief claimed in the petition.

 

48. It necessarily follows from the conclusions I have reached in relation to Section 12(6), that I must refuse the relief claimed in the Kilsaran Notice of Motion.

 

 

Kinlon v. Coras Iompair Eireann

[2005] IEHC 95 (18 March 2005) O’Neill J

 

Firstly, O. 15 r. 2 of the Rules of the Superior Courts deals only with the substitution of plaintiffs. The addition or deletion of a defendant falls to be dealt with under O. 15 r. 13.

 

Secondly the rules of the Superior Courts do not contain a provision similar to O.20 r. 5(2) and (3). The effect of these two sub-rules taken together is that where a mistake occurs such as can be catered for under O. 20 r. 5(3), an amendment can be permitted notwithstanding that the relevant period of limitation from the date of issue of the writ has expired. There is nothing in the Rules of the Superior Court that would permit that to be done.

 

In the absence of a provision in the Rules of the Superior Courts, similar to O. 20 Rs. 5(2)(3) of the English rules, there is no jurisdiction, to cater for a mistake of the kind that is catered for in the English rules, and which the appellant contends is the kind of mistake that has occurred in this case. Hence, the fact that the mistake was a bona fide mistake, or that there was no mistake as to the identity of the correct defendant, and that the mistake only concerned, the correct description of the correct defendant, and that C.I.E. or Bus Átha Cliath, are not prejudiced, are all irrelevant considerations. The rules, simply do not create a jurisdiction to correct the mistake by the substitution sought.

 

The problem that arises in this case is that the Statute of Limitation period of three years expired on the 1st August, 1997. The Plenary Summons issued in this case names only Córas Iompair Éireann as defendant. Apart from this named defendant, the Statute of Limitation expired on the first day of August, in the year 2000 insofar as any other potential defendant is concerned.

 

The issue which then necessarily arises on this appeal is whether or not this court should permit the joining of Bus Átha Cliath to the proceeding in circumstances where it would appear, that Bus Átha Cliath can avail of a defence, which would bar the action under the Statute of Limitations Act 1957 as amended.

 

In this regard Mr. Herlihy for the defendant relies upon the following passage from the judgment of Shanley J. in the case of Southern Mineral Oil Limited (In Liquidation) v. Cooney (No. 2) where the learned judge said as follows at page 245 to 246:-

 

“The attitude of the Supreme Court, as expressed in 1971, by Ó Dálaigh C.J. and Budd J. in O’Reilly v. Granville [1971] I.R. 90 (that the statute was a matter of defence and does not arise until pleaded), to applications to join parties to proceedings has changed somewhat as can be seen from the decision of the present Supreme Court in Allied Irish Coal Supplies Ltd. v. Powell Duffryn Intl. Fuels Ltd. [1998] 2 IR 519. In that case, Murphy J. delivered a judgment (with which Lynch and Barron JJ. concurred). One of the matters in issue was an application by the plaintiff to add a party as a defendant. The trial judge had refused to add the party as a defendant and the Supreme Court affirmed that decision. Murphy J. said at p. 533 of his judgment:-

‘It is a well established rule of practice that a court will not permit a person to be made a defendant in an existing action at a time when he could rely on the Statute of Limitations as barring the plaintiff from bringing a fresh action against him.’

It appears to me that I am bound to follow the later decision of the Supreme Court in Allied Irish Coal Supplies Ltd.”

Mr. O’Herlihy submitted that relying upon the foregoing that it was the established practice not to permit party to be added once the statute of limitation had expired and he indicated that if joined Bus Átha Cliath would seek to avail of the defence provided by the Statute of Limitations.

 

I find myself in considerable difficulty in relation to the question posed above because of what would appear to me to be a conflict of authority on the topic.

 

In his judgment in Southern Mineral Oil Limited Shanley J. expressed the view that he was bound to follow the later decision of the Supreme Court in Allied Irish Coal Supplies Limited, in preference to the judgments of the Supreme Court in O’Reilly v. Granville. I find myself with great regret unable to agree with Shanley J. on this point.

 

In Allied Irish Coal Supplies Limited, the case of O’Reilly v. Granville, does not appear to have been cited either to the High Court or to the Supreme Court. As the leading authority on this point up to that time, the Supreme Court could not have reached a different conclusion without express disapproval of O’Reilly v. Granville and in any event it is difficult to see how either the High Court or the Supreme Court could have concluded that, “It is a well established rule of practice that a court will not permit a person to be made a defendant in an existing action at a time when he could rely on the Statue of Limitations as barring the plaintiff and bringing a fresh action against him” when in fact the leading judgments of the Supreme Court then, were diametrically opposed to that view, that view having been canvassed in O’Reilly v. Granville and rejected by the majority of the court, unless O’Reilly v. Granville was not cited to either Court.

 

It would appear to me that since O’Reilly v. Granville does not appear to have been considered by the Supreme Court in Allied Irish Coal Supplies Ltd. and expressly disapproved, that it remains good law and insofar as I find myself with two conflicting Supreme Court authorities I am inclined to prefer the reasoning of O’Reilly v. Granville.

 

In that case O’Dálaigh C.J. concluded that this court should not refuse to add a defendant to proceedings simply because the defence of the Statute of Limitations would have been available to that defendant on the grounds that, firstly, the court should not assume that a defendant would avail of that defence, secondly that the defence could only be raised by pleading and thirdly in an application to join a defendant the court could not determine in advance whether or not that defence would be successful. Budd J. agreed with O’Dálaigh C.J. but added that if it was apparent beyond doubt that the defence of the Statute was available to the proposed defendant the adding of the defendant would be futile and might very well be refused.

 

Walsh J. disagreed with the majority on one essential point. O’Dálaigh C.J. and Budd J. concluded that both as a matter of substantial law and also by virtue of the concluding sentence of O. 15 r. 13, an added party could not be considered to be a party to the proceedings earlier than the order giving leave to add. Walsh J. was of the opinion that the addition of the party as a defendant had the effect of deeming that party to have been a party to the proceedings from the time the writ was initially issued, thereby having the effect of eliminating a defence under the Statute of Limitations that might have been available to that added defendant, and hence, to avoid that injustice a proposed defendant who could avail of the statute should not be added. Whilst accepting this proposition, which had been urged on the court by counsel for the defendant relying upon the established English line of authority going back to the case of Mabrob v. Eagle Star and British Dominion Insurance Company [1932] 1 K.B. 485, Walsh J. nonetheless concluded that if the judge were to take the view that justice would be served by the addition of the party that he should be added even though this effectively deprived him of the benefit of the Statute of Limitations. He arrived at that conclusion on the basis that the Statute of Limitations did not exist for the purpose of aiding unconscionable and dishonest conduct.

 

The source for the proposition to which expression was given by Murphy J. in Allied Irish Coals Limited to the effect that “It is a well established rule of practice that a court will not permit a person to be made a defendant in an existing action, at a time when he could rely on the Statute of Limitations as barring the plaintiff from bringing a fresh action against him”, is the English line of authority which appears to derive from the Mabro case and was considered in the two cases referred to by Murphy J. in Allied Irish Coal Supplies Limited namely Liff v. Peasley [1980] 1 W.L.R. 781 and Ketteman v. Hansel Properties Ltd. Limited [1987] A.C. 189. In both of these cases the Court of Appeal and subsequently, in the latter case, the House of Lords had to consider the origin of the established rule of practice as aforesaid. Two theoretical base were considered; namely what was described as the “relation back” theory and the “no useful purpose” theory.

 

The former of these theories, was to the effect that when a party was added as a defendant, his joining to the proceedings was related back to the time of the issue of the writ with the consequence of perhaps eliminating a defence under the Statute of Limitations. The latter theory was based on the view that if the time of involvement in the proceeding started with the joining of the additional defendant then the party joined could avail of his defence under the Statute of Limitations and hence no useful purpose would be served in joining him.

 

The House of Lords emphatically, in Ketteman v. Hansel Properties Ltd. rejected the “relation back” theory as the basis of the rule holding that a person added as a defendant did not become a party until the writ had been served on him and that in computing the period of limitation, the date of joinder was not to be related back to the date when the original writ was issued and thus time only ceased to run from the actual date of joinder. It was further held by a majority of 3 to 2 that a plea of limitation was a procedural defence and had to be pleaded.

 

In the light of the judgments of the House of Lords in the Ketteman case it is hard to see how the practice could be described thereafter as an established practice.

 

In my view the only basis upon which a practice of this kind could be said to be an established practice would on the basis of the so-called “relation back” theory. If it was the law that when a party was joined as an additional defendant his joinder was deemed to take effect from the date of the original writ, then in circumstances where a defence under the Statute of Limitations might have been available to him it would be right, in order to avoid injustice, for there to be an established practice not to join an additional defendant in these circumstances.

 

In many cases at the time of the application to join an additional defendant, even though it might be apparent that the limitation period had expired, it would not be known whether the proposed defendant wished to avail of the statutory defence or whether there were circumstances which might estop him from availing of that defence. That being so in a great many cases it could not be said on an application to join an additional defendant that “no useful purpose” would be served by joining that defendant. Hence in my view the concept of “no useful purpose” could not be the basis of established or invariable rule of practice.

 

Having carefully considered the judgments of the House of Lords in the Ketteman case it would seem to me that there is a considerable convergence between the opinions expressed there and the opinions expressed by O’Dálaigh C.J. and Budd J. in O’Reilly v. Granville. It is of course the case that the judgments in the House of Lords don’t go so far as a complete departure from the “established rule of practice”, but the inevitable consequence of these judgments is that this rule of practice could not continue to operate in an application to join an additional defendant unless at the time that that application is made it is proved that the proposed defendant will avail of a defence under the Statute, and that that defence will in all probability be successful.

 

I therefore, as said earlier, prefer the reasoning in the judgments of O’Dálaigh J. and Budd J. in O’Reilly v. Granville and indeed it could be said that having regard to the fact that O’Reilly v. Granville does not appear to have been cited to either the High Court or Supreme Court in Allied Irish Coal Supplies Ltd., that it remains good law which I am bound to follow.

 

In summary therefore I take the law on this topic to be to the following effect:-

 

1. There is no established rule of practice to the effect, that where a defence under the Statute of Limitations may be available to a proposed defendant that such proposed defendant should not be joined as a defendant in proceedings under O. 15 (13) of the Rules of the Superior Court.
2. The joinder of an additional defendant does not have the effect of deeming that defendant to have been a party to the action form the date of issue of the original writ. An added party cannot be considered to have been a party to the proceedings earlier than the order giving leave to add. Therefore there is nothing in the Rules of the Superior Courts or in substantive law which would restrict an added defendants right to rely on a defence under the Statute of Limitations, i.e., an added defendants right to plead the Statute cannot be adversely affected, by his being joined to the action.
3. A defence under the Statute of Limitations must in every case be pleaded. [See O. 19 r. 15].
4. A court should not assume that a proposed defendant sought to be joined under the O. 15 (13) would avail of a defence under the Statute of Limitations.
5. The court in an application under O. 15 (13) to join an additional defendant should not attempt to determine in advance that a potential defence under the Statute of Limitations Act will be successful.

In light of the above conclusions, it follows that I must make the order sought, joining Bus Átha Cliath as a defendant to this action.

 

It would be inappropriate for me to express any view on any potential defence; that might be raised by pleading by Bus Átha Cliath.

 

Approved: O’Neill J.

 

 

 

 

 

 

 

65. The Applicants further submit that the requirement that employees of “associated employers” have the same terms and conditions as the comparator – when no such requirement attaches to employees of the same employer – is incompatible with the requirements of Article 119 as illuminated by the Equal Pay directive. The Applicants submit that the differences in the terms and conditions of employment identified by the Labour Court were fundamentally threefold – superannuation, separate recruitment procedures and industrial relations and pay on termination procedures. They say that superannuation differences are a divergence in one aspect of remuneration and cannot be taken into account because it is the difference in remuneration which is the basis of the Applicants’ claim. The Applicants further submit that neither of the other two alleged differences relate to differences in terms and conditions of employment. In this regard, they refer to the decision of the Supreme Court in O Cearbhaill -v- Bord Telecom Éireann [1994] E.L.R. 54 in which Blayney J. said that the phrase “conditions of service” meant the conditions one would expect to find in a contract of employment between an employer and an employee and that, in considering what these terms would be, it had to be borne in mind that a contract of employment was a contract between an employer and a single employee. That judgment was dealing with whether there was a valid collective agreement and also whether the plaintiffs’ prospects of promotion were part of their conditions of service. It was in these circumstances that Blayney J. said at p. 61:-

 

 

“It does not concern the immediate relationship between the employer and employee as would, for example, the rate of pay, hours of work, length of holidays, sick leave, pension rights, etc. It relates rather to the general manner in which the employer’s business is structured and managed. If an employer were to make it the subject of the contract of employment of individual employees, he would be unable to change it without the consent of each of them. No employer would be prepared to restrict his freedom in this way. For this reason, it seems to me that it would be wholly inappropriate to include a prospect of promotion in a contract of employment and so it could not be considered as being a condition of service.”

 

66. It was in this particular context that Blayney J. set out relevant terms of contract. The present situation is different. I think that the Labour Court did take into account the appropriate matters for the purpose of its decision by taking a broad and overall view in respect of the differences in the terms and conditions of employment between the Applicant civil servants on the one hand and the comparator in Teagasc on the other hand.

 

 

 

 

(c) “Associated Employer” and “Control”

67. The Applicants argue that if they cannot point to a man who is employed in that place (meaning the same place as the woman) by the same employer then they can point to a comparator employed by an associated employer if the employees, whether generally or of a particular class, of both employers have the same terms and conditions of employment and if both are employed on like work. The Applicants analyse the situation in the light of section 2(2) of the Anti-discrimination Pay Act, 1974. It is conceded that both the Applicants and the comparator are employed on like work. Teagasc is a body corporate and accordingly the crucial question is whether the Department or the State either directly or indirectly has control of Teagasc in the context of the 1974 Act and EC Equal Pay law. It is not necessary to decide whether section 2(2) of the Act of 1974 provides a definition of associated employers or whether it merely states an instance when employers are to be treated as associated as Teagasc is admittedly a body corporate and the crucial question is whether the Department or the State has control of Teagasc.

 

68. I note in passing that the English legislation which was the subject of the Scullard case defines “associated employers” in terms of companies; the implicit distinction therein between employees of limited companies and other employers was found to be unacceptable. By comparison, the Irish legislation is wider and uses the term “body corporate”.

 

69. While it is arguable that the provision confines the circumstances in which employers may be associated to those in which one of the employers is a body corporate, I do not have to decide whether section 2(2) of the 1974 Act is exemplary or exclusionary, as Teagasc is admittedly a body corporate as provided in Article 1 of the first schedule of the 1988 Act creating it and section 2(2) stipulates the criterion according to which “association” is to be ascertained. This criterion is control. The term “control” is not defined by the 1974 Act.

 

70. Does the other employer, being the State or government or the Department, have control of Teagasc within the meaning of section 2(2)? There is no suggestion that both Teagasc and the State are bodies corporate of which a third person, directly or indirectly, has control. The Applicants say that the Labour Court erred in addressing this question by asking whether the Department exercised control over Teagasc. While the Labour Court in its reasoning did refer to the Department, it seems to me that the Labour Court was referring to the Department as synonymous with the State and at page 4 said:-

 

 

“In respect of the department, the State is the employer and the employees are civil servants. Teagasc is an employer in its own right, and its employees are its servants. The Court finds that for the purposes of section 2(1) of the Act, these are two separate and distinct employers.”

 

71. Some of the text books suggest that “associated employers” are defined in section 2(2) in terms of companies. This seems too narrow as the phrase used is “body corporate”. It would seem that employers are “associated” if one is a body corporate of which the other has control or if both are bodies corporate of which a third person has control. The Applicants argued before the Labour Court that section 2(2) of the 1974 Act does not as such define the phrase “associated employer” but rather explains or gives an example of it. I think that the provision with regard to an associated employer had its origin in preventing the mischief of an employer using subsidiaries as the employer of a category of workers in order to evade the equal pay principle.

 

72. The Applicants submitted that the State does in fact exercise control over Teagasc. Teagasc was established by the State and can be disestablished by the State. Its functions are prescribed by statute and the exercise of additional functions requires a ministerial order laid before both houses of the Oireachtas. The State provides considerable funding to Teagasc. The Respondent and the Minister for Finance must consent to appointments to Teagasc (see section 8 of the 1988 Act) and likewise the pay and other terms and conditions of grades of staff and the numbers of staff in each grade all require the consent of the Respondent and the Minister for Finance. The Applicants relied on the decision in Hasley -v- Fair Employment Agency where it was held that the Fair Employment Agency and the Equal Opportunities Commission for Northern Ireland were controlled by the Department of Economic Development and the Department of Finance and Personnel. The Labour Court made careful findings on whether the Department has control over Teagasc and said at p.7:-

 

 

“In the view of the Court, the Department would certainly have an important supervisory function in relation to how Teagasc spends it money. But this supervision is to do with State management of public finances, and not with control of over how a State body does its business. The Department cannot tell Teagasc how to do its work, or even what work to do. Teagasc’s functions are provided for by statute, and it has ‘all such powers as are necessary or expedient for the purposes of its functions’ under section 4(4) of the 1988 Act. There are certain functions which it cannot do unless authorised by the Minister, and it needs the consent of the Minister to provide any services outside of the State, but these controls are limited and to do with the extent of the remit which Teagasc has been given, and not with ‘how’ certain things are to be done. The conferring of any additional functions on Teagasc by the Minister must be by order, and such order must be laid before both Houses of the Oireachtas. The Minister provides funding to Teagasc by the making of advances to it, but he cannot tell it how he wants the money spent. Most importantly, the Minister could not unilaterally decide to close Teagasc down. If Teagasc were to be put out of existence, that decision would not be one for the Minister or the Department to take; it would be a matter for the government and the Oireachtas. The word ‘control’ is not defined in the Act, but its ordinary sense is to mean that there is a power of directing or to command an activity. The Court is satisfied that while the Minister has certain authority in relation to Teagasc, he does not have direct control of it, and such indirect control as he might have through his membership of the government and as a member of the Oireachtas is too far removed from real control to amount to control within the meaning of the section.”

 

73. The Labour Court helpfully went on to analyse Hasley -v- Fair Employment Agency in which it was argued that the Fair Employment Agency and the Equal Opportunities Commission for Northern Ireland were “associated employers” since both were directly or indirectly controlled by the Department of Economic Development and the Department of Finance and Personnel. Lowry L.C.J. held that the Departments did control the F.E.A. and the E.O.C. He found that those Departments had financial control over the two bodies and also control over the numbers and grades of the persons employed and of their terms and conditions of employment. By comparison with this control, the Appeal Court found that the functional independence that the F.E.A. and the E.O.C. enjoyed was irrelevant. The Labour Court, by way of contrast, made the distinction that it was not being suggested that both Teagasc and the Department were “bodies corporate” and that the Department of Finance was a third “person” within the meaning of section 2(2) of the Act which has control over both. In any event, the Labour Court clearly felt that the functional independence of Teagasc differed from the subservience of the F.E.A. and the E.O.C. in Northern Ireland.

 

74. In my view, the Labour Court properly directed its attention to the issue of control and in this respect made reasonable and appropriate findings. While voting control may be relevant in a company law situation, the badges of control which the Labour Court looked at were relevant given that Teagasc is a body corporate and a creature of statute.

 

75. Counsel for the Respondent says that there is a dearth of Irish authority on the issue of “associated employers”. He referred to a case of Clonskeagh Hospital -v- Two Telephonists E.P. 40 / 1979 in which an Equality Officer was dealing with the situation of an applicant who was working in Clonskeagh Hospital and claimed to be entitled to pay equal to that received by a male comparator employed in a different hospital. On the basis that both hospitals were “run by” the same Health Board, they were found to have been “associated employers” for the purposes of section 2 of the Act of 1974. This finding was made for the purposes of a recommendation of the Equality Officer and seems to have been a rational and practical application of the section. The Labour Court, by way of contrast, in the present case found as a fact that the Respondent could not tell Teagasc how to do its work or even what work to do and on the basis of the findings that the Respondent cannot tell Teagasc how certain things are to be done or how money under its control is to be spent, it seemed a reasonable conclusion that Teagasc is not run by the government but is an independent body with regard to day to day control. Thus, in my view, the Labour Court in deciding that Teagasc was not controlled by the Respondent did not err in law and had regard to the relevant criteria as to control.

 

 

6. APPLICATION FOR REFERENCE FOR PRELIMINARY RULING UNDER ARTICLE 177
7. Counsel for the Applicants has drawn to my attention that application for a reference under Article 177 has to be made to this Court prior to this Court giving judgment. There is an appeal to the Supreme Court open from the judgment of the High Court in this case and accordingly it is a matter for the discretion of this Court as to whether there should be such a reference. EC law is fundamental to the resolution of this case with regard to

 

 

(i) whether the claimants’ situation falls within the scope of the direct applicability of Article 119 and

 

(ii) whether the Irish legislation faithfully implements the principle of equal pay in Article 119 and the Directive.

 

77. On my analysis of the Defrenne (No. 2) and Macarthys cases, the European Court of Justice has clearly distinguished between direct and overt discrimination which can be dealt with solely on the criteria referred to in Article 119 and secondly, by way of contrast, indirect and disguised discrimination which can only be identified by reference to Community provisions, such as a directive, or by national legislation which spells out the tests to be applied in implementing the principle in Article 119. The European Court of Justice in those cases has confined the scope for location of a comparator and did not extend the range by allowing a comparison with an hypothetical comparator of the other gender. These cases seem to be clear authority on this issue and, in coming to these decisions, the Court must have been well aware of the difficulty which could arise in situations of the type of single gender employment establishments such as in the electrical board assembly business where there would be a dearth of male comparators. In short, the Applicants’ argument is that if equal pay legislation is to have a real effect in undermining gender discrimination then it should provide a mechanism for assuring that all women are able to secure what would be the male rate for the job. However, the European Court of Justice rejected this approach in both Defrenne (No. 2) and Macarthys -v- Smith by holding that comparisons are confined to parallels which may be drawn on the basis of concrete appraisals for the work actually performed by employees of the opposite sex within the same establishment or service. Therefore, as this area of EC law has already been the subject of interpretation in the European Court, I do not consider a reference on a question of European law to be necessary for this decision. However sympathetic one may be to the argument that there is a difficulty in the situation with regard to single gender employment type situations, nevertheless these two decisions seem to be clear authority on this aspect. In the absence of an appropriate comparator of the opposite sex, one cannot say that there is indirect discrimination in any given situation. In the present case, there is a false assumption that if the male comparator in Teagasc was working for the Department as a civil servant then he would be paid more than the female Applicants for doing the same work. In fact, the reality is that in the civil service he would be paid on the basis of his grade. There was no evidence before the Labour Court to suggest that the male comparator in Teagasc if employed in the Department of Agriculture would have been paid any more than the Applicants. Accordingly, this is not an appropriate case in which to exercise the untrammelled discretion of this Court to make a reference under Article 177.

 

78. The Irish legislation contains a further definition of “same employer” extending the category of those who may benefit from the equal pay principle to situations where employees have associated employers and the same terms and conditions of employment. The necessity for this latter requirement has already been considered. Having failed to fall within the category of “same establishment or service” under Community law or the analogous “same employer” under Irish law, under the 1974 Act the claimants had the further possibility of bringing their claim within these further criteria. Considering the interplay of Community and Irish law in this context, I agree with Costello J. in Bank of Ireland -v- Kavanagh when he said:-

 

 

“An examination of Community law clearly shows how faithfully the Irish statute has fulfilled Ireland’s Community obligations”.

 

79. For these reasons, I do not think that the claimants are entitled to the same rate of remuneration as the male comparator in Teagasc and I decline to set aside the determination of the Labour Court.

 

 

Sandy Lane Hotel Ltd -v- Times Newspapers Ltd & ors

[2009] IESC 75

 

 

 

JUDGMENT of Mr. Justice Hardiman delivered the 16th day of November, 2009.

 

This is an appeal by the defendants from an order of the High Court, Johnson J., (as he then was) made the 7th November, 2005, whereby the High Court granted the application of the plaintiff to substitute “Sandy Lane Hotel Co. Limited” for “Sandy Lane Hotel Limited” in the present proceedings.

 

This order was made pursuant to Order 63 Rule 1(15) of the Rules of the Superior Courts.

 

The underlying cause of action here is libel. The plaintiff takes exception to an article published by the defendant as long ago as the 1st March, 1998. Proceedings by the present plaintiff were instituted in June 1998. In the course of the discovery process a variation between the name of the plaintiff, and the name of the Company shown on various Hotel accounts was noticed. The proceedings, after discovery, went dormant between 2001 and 2004. In June of the latter year a Notice of Intention to Proceed and a Notice of Trial were served. The present application was subsequently brought.

The High Court judgment.

The High Court judgment was very brief and the agreed note of counsel may be set out in full:

 

 

“Having considered the affidavit’s evidence and the submissions by counsel for the parties, Johnson J., having expressed the views during oral argument that (a) he believed that the defendants were at all times aware of the fact that the person taking the case was the owner of the Sandy Lane Hotel and (b) that justice would not be served if the position adopted by the defendants on the application were to succeed, ruled as follows:

‘I will grant an order in terms of the plaintiff’s Notice of Motion. In my view there is no injustice in so doing.’ ”

 

 

 

The Notice of Motion.

The Notice of Motion seeks an order “pursuant to Order 63 Rule 1(15) of the Rules of the Superior Courts for the correction of the name of the plaintiff in these proceedings to “Sandy Lane Hotel Co. Limited”.

Order 63, Rule 1(15) provides that the Master of the High Court may make:

 

 

“An order for the correction of clerical errors or errors in the names of parties in any proceeding, whether on consent or not, but subject to re-service when not on consent.”

 

The issue of this appeal may be stated simply: the plaintiff claims that the present application is within the rule just cited. The defendant denies this and says that the application should more properly be brought under Order 15, Rule 2 or Order 15, Rule 13 of the Rules. The defendant does assert that if the plaintiff were to bring an application under the last mentioned rules, it would not only contend that there was no mistake made but would further contend that the application should not be granted because the cause of action in the proposed plaintiff is statute barred. It would make a similar submission in relation to an application under Order 15, Rule 13.

The facts.

The Sandy Lane Hotel is a very widely known luxury hotel in Barbados. Since 1961 it had been operated by a Barbados Company called Sandy Bay Hotel Limited. This company owned the hotel, its grounds, and an adjacent golf course. At some stage it became part of the Trust Houses Forte Group.

 

In 1996 there was a sale to a “consortium of businessmen” by the Trust Houses Forte Group and this was achieved by selling the Company to a St. Lucia Company, Sandy Lane Hotel Limited. This Company then bought Sandy Bay Hotel Limited, which seems to have been a Barbados Company. About the same time a further Barbados Company, Sandy Lane Properties Limited was set up so that it could purchase some 500 acres of land 2 kilometres from the hotel but touching the furthest point of its grounds.

 

Sandy Lane Properties Limited is in turn owned by another St. Lucia Company, Sandy Land Holdings Limited. The effect of all this is that the two Barbados Companies, Sandy Bay Hotel Limited and Sandy Lane Properties Limited, were owned by two St. Lucia Companies, Sandy Lane Hotel Limited and Sandy Lane Holdings Limited.

 

On the 22nd April, 1997, Sandy Bay Hotel Limited, the Company which both owns and operates the Sandy Lane Hotel, changed its name to Sandy Lane Hotel Co. Limited. That is how and when the proposed plaintiff came into being.

 

All of these complex corporate transactions were carried out for tax planning purposes and to facilitate acquisitions.

 

The above account is based on a letter from the plaintiff’s solicitors, William Fry and Company of the 16th May, 2005 and on the affidavit of Brian O’Sullivan of the 11th June, 2005.

 

Mr. O’Sullivan is the Company secretary of the present plaintiff. He says frankly that:

 

 

“At the time of change of name in 1997, I thought nothing of the inclusion of the word ‘Co.’ in the title of the plaintiff.

Indeed, when the article appeared in the Sunday Times, and when proceedings were subsequently issued, I understood the name of the plaintiff company was Sandy Lane Hotel Limited. It was only when the issue was recently drawn to my attention that I recalled that the word ‘Co.’ had in fact been included in its title on the initiative of [a Barbados lawyer] as set out above.”

 

 

He further says that:

 

“The reason the error [that is, the alleged error in the name of the plaintiff] occurred is that the inclusion of the word ‘Co’ in the name of the plaintiff was not originally intended.”

 

It may be noteworthy that in the written submissions of the plaintiff, what they say is an error in the plaintiff’s name in the title of the proceedings is called “a clear case of an administrative error”.

They go on to submit that the plaintiff in making the present applicant:

 

 

“was not seeking to add a new party or to substitute a different party for the party who instituted the proceedings. It was simply seeking to correct an error in the name of the plaintiff as appearing in the title of the proceedings… this is not a case of the wrong plaintiff suing the defendant. The proceedings were issued on behalf and with the instructions of Sandy Lane Hotel Co. Limited through administrative inadvertence, the plaintiff was named as “Sandy Lane Hotel Limited” in the title to the proceedings.”

 

The plaintiffs then go on to characterise the defendant’s opposition to the application as “opportunistic”. They say “as a matter of happenstance, the plaintiff’s parent has the name Sandy Lane Hotel Limited. It is this happenstance that permits the defendants the opportunity to contend that the plaintiff ought to have applied for an order of substitution of one party for another as the plaintiff under Order 15 as opposed to Order 63.”

The Companies, of course, bear the names the “consortium” chose, and altered when they pleased. This is not “happenstance”.

 

The submissions quoted above, in my view, go to the nub of the case. I am not sure that they are helpful to the plaintiff. Order 63 Rule 1(15), which is a relief that may be granted ex parte by the Master, relates to “the correction of clerical errors or errors in the names of parties in any proceeding”.

 

This is to be contrasted with Order 15 Rule 2 which provides:

 

 

“Where an action has been commenced in the name of the wrong person as plaintiff, or where it is doubtful whether it has been commenced in the name of the right plaintiff, the court may, if satisfied that it has been so commenced through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as a plaintiff upon such terms as may be just.”

 

Order 15 Rule 13 provides:

 

“No cause or matter shall be defeated by reason of the mis-joiner or non-joiner of parties, and a court may in every cause or matter deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the court to be just, order that the names of any parties improperly joined, whether as plaintiffs or as defendants, be struck out and the names of any parties, whether plaintiffs or defendants who ought to have been joined or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all questions involved in the cause or matter, be added…”.

 

In construing Order 63 Rule 1(15) it is necessary first to note that the term “clerical error” has been the subject of judicial decisions.

In R. v. Commissioner of Patents, ex parte Martin [1953] 89 CLR 381, Fullager J. held that:

 

 

“… the characteristic of a clerical error is not that it is in itself trivial or unimportant, but that it arises in the mechanical process of writing or transcribing.”

 

In a later case, re Meres Application [1962] RPC 182 the term “clerical error” was described as follows in another patent case, in words which plainly followed the case cited above:

 

“The words ‘clerical error’ must, I think, be taken to mean a mistake made in the course of a mechanical process such as writing or copying as distinct from an order arising, e.g. from lack of knowledge, or wrong information, in the intellectual process of drafting language to express intentions.”

 

Having regard to the structure of Order 61 Rule 1(15) I believe that the phrase “errors in the names of parties” must be construed in the same sense as the proceeding phrase, with which it is “eiusdem generis”, “clerical errors”. Either category of error must be construed in contradistinction from another sort of error arising from “lack of knowledge or “wrong information…”. It appears to me, from a consideration of Mr. O’Sullivan’s affidavit on behalf of the plaintiff, that the mistake made in this case is not one which can be described as a clerical error, or anything like it. He frankly admits that the name “Sandy Lane Hotel Co. Limited” was not originally intended to be used in the proceedings. This was because, although he knew of the history of the companies, it was not present to his mind, or to the mind of the lawyers, that the company actually operating the hotel was the Sandy Lane Hotel Co. Limited. This in turn was because, as he very frankly says “At the time of the change of name in 1997 I thought nothing of the inclusion of the word ‘Co.’ in the title of the plaintiff.”

This is not in my view a clerical error. The error here arose due to a mistaken belief and a failure to ascribe any significance to the change of name of 1997. This is a misguided state of mind with which one cannot have much sympathy, given that it was made by or on behalf of “a consortium of businessmen”, in the course of a complicated series of arrangements made for tax planning purposes, in which they obviously had the benefit of the best legal and taxation advice.

 

The consortium running the Sandy Lane Hotel were of the view that it was important for corporate or tax planning purposes that the entity operating the hotel should be the Sandy Lane Hotel Co. Limited. Nor did this simply involve a change of name: there was another, completely different, Company called the Sandy Lane Hotel Limited. The operating Company was a Barbados Company but the latter Company, which appears as plaintiff at present, is a St. Lucia Company. The plaintiff’s case would in my opinion have been a stronger one if they had simply failed to get the name of the operating company right. But in the events that happened they actually used the name of an entirely different Company, which however appears to be the parent Company of the operating Company. This in my view is not a clerical error or anything similar to a clerical error. It requires, if it is to be remedied, the substitution of a new entity which co-existed the plaintiff at all material times. Because of the delay (and there has been gross delay) the defendants might be able to object to the substitution of a new party on the grounds that the statute of limitations has run as against that party. Since this is a separate issue which may well come before the courts, I will say nothing about it. But I would not be prepared to deprive the defendants of the opportunity of raising it.

 

I do not believe that this is an application appropriate to Order 63 Rule 1(15) and would therefore allow the appeal and refuse the relief sought by the plaintiff.

 

Southern Mineral Oil Ltd. (No.2) v. Cooney

[1998] IEHC 67; [1999] 1 IR 237; [1998] 2 ILRM 375

 

JUDGMENT delivered by Mr Justice Peter Shanley the 11th day of May 1998.

 

1. On the 10th February, 1995, Mr Justice Murphy ordered that an issue be tried on oral evidence in respect of the reliefs sought in a Notice of Motion dated the 18th August, 1994. In the Notion of Motion relief was sought against the Respondents for Declarations pursuant to Sections 297 and 298 of the Companies Act, 1963 and for an Order for the examination of the conduct of the Respondents pursuant to Section 298(2) of the Companies Act, 1963, and further for an Order compelling the Respondents to contribute to the assets of the companies, such sum as the Court might think just. It is common case that the events in relation to which the entitlement to relief is sought occurred in 1988, being the year in which each of the companies in the title to these proceedings was wound up.

 

2. After the issue of the Notice of Motion dated the 18th August, 1994, the Respondents sought (by way of a Notice of Motion dated the 7th December, 1994) an Order dismissing the Notice of Motion on the grounds of want of prosecution. Murphy J. refused to so dismiss the Motion as did the Supreme Court on appeal (Keane, Lynch and Barron J.J., unreported, 22nd July, 1997). In an obiter dictum, Lynch J said (at page 6 of his unreported Judgment):-

 

 

“On my reading of Sections 297 and 298 of the Companies Act, 1963 under which these proceedings are brought, neither the Revenue Commissioners nor the Liquidator are entitled to bring them in the name of the Companies”.

 

3. Both Keane and Barron J.J. agreed that this question, as to whether the proceedings were properly constituted, was one which would have to be determined by the High Court .

 

4. The present application is one made by the Liquidator of each of the two companies to substitute himself as Applicant in place of those companies in respect of the issue ordered to by tried by Mr Justice Murphy on 10th February, 1995. This Court is not being asked to decide on the issue raised by the members of the Supreme Court in each of their Judgments of 22nd July, 1997.

 

 

THE SUBMISSIONS OF THE PARTIES

5. Counsel for the Applicant relied on Order 15 of the Rules of the Superior Courts and in particular Rules 2 and 13 of that Order. The Court, said Counsel for the Applicant, had jurisdiction at any stage in any proceedings to join any party “who ought to have been joined or whose presence before the Court may be necessary in order to enable the Court to effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter”. (Order 15, Rule 13). He also submitted that Order 15, Rule 2, of the Rules of the Superior Courts allowed for the joinder of a plaintiff where the Court is satisfied that the action was commenced in the name of the wrong person as plaintiff through a bona fide mistake and that it was necessary for the determination of the real matter in dispute so to do. Counsel for the Respondents, on the other hand, said that Order 15, Rule 2, had no application to the facts of the instant case being a rule intended to cover situations where a party was mistakenly described or named, such that the wrong party ends up suing or being sued. Counsel for the Respondents submitted that such circumstances do not exist in the present case and that no evidence has been led on behalf of the Applicant of any bona fide mistake so as to allow the Rule (Order 15, Rule 2) to be invoked. The Respondents also submitted that even if the Court was satisfied that a mistake had been made, it should not make an Order when to do so would contravene what was suggested was a well established rule of practice that a Court will not add a party after the expiry of the relevant limitation period.

 

 

THE APPLICABLE LAW

6. The events which give rise to the claim for relief occurred in 1988 before the enactment of the Companies Act, 1990: Therefore, the applicable sections of the Companies Act, 1963, in respect of which relief is claimed, are Section 297 and 298 of the 1963 Act.

 

 

Section 297(1) provides:-

“If in the course of the winding up of a company it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the Court, on the application of the liquidator or any creditor or contributory of the company, may, if it thinks proper so to do, declare that any persons who were knowingly parties to the carrying on of the business in the manner aforesaid shall be personally responsible, without any limitation of liability, for all or any of the debts or liabilities of the company as the Court may direct”.

 

Section 298(1) of the 1963 Act provides:-

 

“If in the course of winding up a company it appears that any person who has taken part in the formation or promotion of the company, or any past or present director or liquidator or any officer of the company, has misapplied or retained or become liable or accountable for any money or property of the company, or been guilty of an misfeasance or breach of trust in relation to the company, the Court may on the application of the liquidator or of any creditor or contributory, examine the conduct of the promoter, director, liquidator or officer, and compel him to repay or restore the money or property or any part thereof respectively with interest at such rate as the Court thinks just, or to contribute such sums to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust as the Court thinks just”.

 

7. The first question that arises is what, if any, limitation period applies to the present claim? For present purposes it is sufficient to look at that part of the claim which is founded upon Section 297 of the Companies Act, 1963: Section 297(1) involves, inter alia, an assessment of the conduct of a director by a Court in consequence of which the Court may, in its discretion, declare the director to be personally liable for all or any of the debts of the company. It is the director’s conduct which causes the discretion of the Court to be exercised. If as a result of the exercise of that discretion a sum of money becomes payable by the director, the cause of action is not founded upon the Declaration, but rather upon the conduct which gives rise to the Declaration in the first place.

 

8. While the cause of action accrues at the time of the act of fraudulent trading of the director, the next issue is, what is the period of limitation? Section 11(1)(e) of the Statute of Limitations, 1957 provides that:

 

 

“The following actions shall not be brought after the expiration of six years from the date upon which the cause of action accrued.

(e) Actions to recover any sum recoverable by virtue of any enactment ….”

 

9. While the proceedings brought pursuant to Section 297 of the Companies Act, 1963 are for a Declaration that the Respondents should be personally liable for the debts of the companies, they are nonetheless, in my opinion, “an action to recover any sum recoverable by virtue of any enactment” despite the fact that the Court has a discretion as to whether or not to make a Declaration and equally has a discretion as to what debts it will make the director liable for in the event of it making such a Declaration. Thus, if I am correct in the view that the cause of action is not founded upon the Declaration made pursuant to Section 297 of the Act but rather upon the conduct which gives rise to the Declaration in the first place, then the cause of action in the instant case accrued in 1988 prior to the winding-up of each of these companies. In the case of Re. Farmizer (Products) Limited, Moore & Anor v. Gadd & Anor 1997 BCLR 589 , the Court of Appeal in England and Wales had to consider a similar issue under similar but not identical legislation. Section 214 of the Insolvency Act, 1986 dealt with a form of fraudulent trading. It provided in sub-section (1):-

 

 

“….. If in the course of the winding-up of a company it appears that sub-section (2) of this section applies in relation to a person who is or has been a director of the company, the Court on the application of the liquidator may declare that that person is to be liable to make such contribution (if any) to the company’s assets as the Court thinks proper.”

 

10. Section 9(1) of the Limitation Act, 1980 in England and Wales provided:

 

 

“An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the dates on which the cause of action accrued…….”

 

11. Peter Gibson L.J. giving his Judgment (with which the other members of the Court agreed) said at page 599:

 

 

“Does the fact that the Court has a discretion whether to make a Declaration at all, even if it appears to the Court that Section 214(2) applies, and as to the amount of the contribution, if any, cause the claim made not to be an action to recover any sum recoverable by virtue of any enactment? I do not think so. If one asks, ‘By virtue of what is the sum of £1.25 million recoverable?’, the answer would surely be: ‘By virtue of Section 214’. It is of course only capable of being recovered if the Court chooses to make the Declaration after the statutory conditions are shown to be satisfied, but I have no difficulty in holding that Section 9 of the 1980 Act applies to such a case. Mr Oliver accepted that the recoverable sum under the section could be damages. That the Court with jurisdiction to award the recoverable sum has a discretion was not a matter which deterred Lord Goddard C.J. in West Riding of Yorkshire C.C. v. Huddersfield Corporation 1957 1 All England Reports 669, 1957 1 QB 540, when he held that for the purposes of the predecessor to Section 9(1), proceedings for an Order for a financial adjustment under Section 151 of the Local Government Act, 1933, were an action for the recovery of any sum recoverable by virtue of an enactment . I therefore agree with the Judge’s conclusion that Section 9(1) is the applicable provision of the 1980 Act.”

 

12. Accordingly, I am of the view that the causes of action in relation to which relief is sought under Sections 297 and 298 of the Companies Act, 1963 accrued in 1988, that the relief sought is for “the recovery of any sum recoverable by virtue of any enactment” (Section 11(1)(e) of the Statute of Limitations, 1957) and that the period of limitation is six years.

 

13. Order 15, Rule 2, of the Rules of the Superior Courts provides:-

 

 

“Where an action has been commenced in the name of the wrong person as plaintiff, or where it is doubtful whether it has been commenced in the name of the right plaintiff, the Court may if satisfied that it has been so commenced through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms as may be just.”

 

14. Order 15, Rule 13, of the Rules of the Superior Courts provides:-

 

 

“No cause or matter shall be defeated by reason of the misjoinder or non-joinder of parties, and the Court may in every cause or matter deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. The Court may at any stage of the proceedings either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the names of any parties improperly joined, whether as plaintiffs or as defendants, be struck out and that the names of any parties, whether plaintiffs or defendants, who ought to have been joined, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added. No person shall be added as a plaintiff suing without a next friend, or as the next friend of a plaintiff under any disability without his own consent in writing thereto. Every party whose name is so added as defendant shall be served with a summons or notice in manner hereinafter mentioned, or in such other manner as the Court may direct, and the proceedings as against such party shall be deemed to have begun only on the making of the Order adding such party.”

 

In O’Reilly -v- Granville , 1971 IR 90 , the Supreme Court was dealing with an application by a plaintiff to add a defendant, pursuant to the provisions of what is now Order 15, Rule 13. The Court allowed the plaintiff add the defendant although the limitation period had expired as against that defendant. O’Dalaigh C.J. said at pages 93 and 94:-

 

“Counsel for the proposed new defendant has supported the Order of the High Court because as he urged, the effect of adding his client as a defendant would be to deprive the client of his right to raise the Statute of Limitations. The underlying basis of this submission is that, if added now, the proposed defendant would be treated as if he had been a party when the proceedings were first issued. I have already cited the concluding words of Order 15, Rule 13, which purport to fix the date of service of the originating summons as the date of the beginning of the proceedings against the new defendant. Even if these words of Order 15, Rule 13, were intended only to regulate procedural matters – e.g. to fix a date as from which an appearance shall be entered – in my opinion the position will be substantially the same as a matter of substantive law. An added party cannot be considered to have been a party to the proceedings earlier than the Order giving leave to add. It would be contrary to the fact to hold otherwise; to operate retrospectively the Court’s Order would, in my opinion , require statutory support.

 

I find nothing in the rules or in substantive law which would restrict the proposed defendant’s right to raise the Statute of Limitations if added as a party and by this I mean that the defendant’s rights to plead the statute (such as they are) cannot be affected adversely by being added as a party now.”

15. Later, again at page 94, O’Dalaigh C.J. observed:-

 

 

“First, the statute is not disregarded because the added party’s rights are not affected and, secondly, the statute is required to be specifically raised by pleading – the rules say so. It is well established law that a Statute of Limitations which merely bars the plaintiff’s remedy must be disregarded unless pleaded in a defence; it is only a Statute of Limitations which extinguishes the plaintiff’s right which can be relied upon without being pleaded.”

 

16. Budd J. agreed with the Chief Justice: He said at pages 109-110 as follows:-

 

 

“Rule 13 of Order 15 does not in any way render it pointless to add the proposed defendant as defendant, nor does it destroy his right to rely upon the statute if and when pleaded. The learned Judge did not have before him the full facts (which have yet to be determined) and was not entitled to refuse the Order sought on such material as was before him, particularly as the facts were in dispute. The plaintiff has made a strong prima facie case to support his contention that the statute does not apply against him by reason of an implied agreement not to rely on it or by reason of waiver or estoppel and he is entitled to have the matter determined at the hearing of the proceedings. Moreover, the ruling of the learned Judge was premature. The statute is a matter of defence and does not arise as such until pleaded and it was not open to the Judge to rule as he did at this stage of the proceedings – particularly when the facts were still in issue.”

17. Whilst the views of Budd J. were stated clearly, namely, that the statute is a matter of defence and does not arise as such until it is pleaded, nonetheless at page 106 of the same Judgment he said as follows:-

 

 

“If it were apparent beyond doubt that the statute applied to this case, an application to add the proposed defendant as a party might very well be refused as being a futile operation; but that is not the position here.”

 

18. The attitude of the Supreme Court, as expressed in 1971 by O’Dalaigh C.J. and Budd J. in O’Reilly -v- Granville (that the statute was a matter of defence and does not arise until pleaded) to applications to join parties to proceedings has changed somewhat as can be seen from the decision of the present Supreme Court in Allied Irish Coal Supplies Limited -v- Powell Duffryn International Fuels Limited , (unreported Judgment, 19th December, 1997) . In that case, Mr. Justice Murphy delivered a Judgment (with which Lynch and Barron J.J. concurred). One of the matters in issue was an application by the plaintiff to add a party as a defendant. The trial Judge had refused to add the party as a defendant and the Supreme Court affirmed that decision. Murphy J. said at page 8 of his unreported Judgment:-

 

 

“It is a well established rule of practice that a Court will not permit a person to be made a defendant in an existing action at a time when he could rely on the Statute of Limitations as barring the plaintiff from bringing a fresh action against him.”

 

19. It appears to me that I am bound to follow the later decision of the Supreme Court in Allied Irish Coal Supplies Limited , supra.

 

20. As to Order 15, Rule 2, of the Rules of the Superior Courts there is a similar, but not identical, rule in the English Rules of the Supreme Court; Order 20, Rule 5(1), (2) and (3) provide as follows:-

 

 

“(1) Subject to Order 15, Rules 6, 7 and 8 and the following provisions of this rule, the Court may at any stage of the proceedings allow the plaintiff to amend his writ or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct.

 

(2) Where an application to the Court for leave to make an amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in such circumstances mentioned in that paragraph if it thinks it just to do so.

 

(3) An amendment to correct the name of a party may be allowed under paragraph (2), notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue, or as the case may be, intended to be sued……..”

21. The effect of these rules was considered in the English case of Evans Construction Company Limited -v- Charrington & Company Limited & Anor , 1983 1 AER 310 , where Donaldson L.J., in the Court of Appeal said:-

 

 

“In applying RSC, Order 20, Rule 5(3), it is in my Judgment important to bear in mind that there is a real distinction between suing A in the mistaken belief that A is the party who is responsible for the matters complained of and is seeking to sue B but mistakenly describing or naming him as A and thereby ending up suing A instead of B. The rule is designed to correct the latter and not the former category of mistake. Which category is involved in any particular case depends on the intentions of the person making the mistake and they have to be determined on evidence in the light of all the surrounding circumstances.”

 

22. In the more recent case of Re. Probe Data Systems , 1989, BCLC 561 , the Secretary of State for Trade and Industry in England Wales applied to the Court under RSC, Order 20, Rule 5(3) for leave to amend an originating summons to substitute himself as applicant instead of the official receiver. Millet J., refusing the application, said at page 563:-

 

 

“At first sight it may appear that in order to substitute a new plaintiff there are two requirements which must be satisfied. First, that the mistake sought to be corrected was a genuine mistake; and second, that it was not misleading or such as to cause any reasonable doubt as to the identity of the intended plaintiff. That is not the case, for not every mistake can be corrected by amendment under Order 20, Rule 5(3). The mistake must have been at mistake as to the name or identity of the party.”

 

CONCLUSIONS

23. I deal firstly with the claim that the Liquidator can be substituted as Applicant pursuant to Order 15, Rule 2, of the Rules of the Superior Courts. In my view he cannot. The Applicant has not sought to lead any evidence of the occurrence of a bona fide mistake such as would be necessary to establish before the jurisdiction given by Order 15, Rule 2, could be exercised. The Liquidator clearly intended to institute the proceedings in the name of the companies in liquidation and he did so believing this was the correct way to proceed. As Millet J. said in Re. Probe Data Systems, supra, the intended Applicant and the actual Applicant were one and the same person. The Liquidator’s mistake (if mistake it be) was to sue in the companies name in the mistaken belief that the companies were possessed of the cause of action as opposed to the Liquidator himself. This is not a category of mistake to which Order 15, Rule 2, applies. Equally, adopting the second of the requirements cited by Millet J., it seems clear that the Respondents at all material times were of the view that the Applicants were the companies in liquidation and not the Liquidator. To now allow an amendment would be to suggest that the Respondents at all material times were in no real doubt but that the intended Applicant was in fact the Liquidator. This is patently not the case and for these reasons liberty to substitute the Liquidator for the companies in liquidation pursuant to Order 15, Rule 2, will be refused.

 

24. If the observations of the Supreme Court are correct (as to who is the appropriate Applicant) then clearly the Liquidator is a party whom the Court would ordinarily consider adding as a party pursuant to Order 15, Rule 13, of the Rules of the Superior Courts: He is clearly a party who ought to have been joined in the action. However, it seems clear that, ten years after the alleged fraudulent trading and misfeasance of the Directors, any cause of action which the Liquidator has against the Directors is barred, having regard to the applicable six year period of limitation provided for in Section 11(1)(e) of the Statute of Limitations, 1957. There is nothing in the Affidavits which were before me which suggest that the limitation period has not expired. While it may be argued that the Court should allow the application and let the Directors plead the statute in their defence, the decision in Allied Irish Coal Supplies Limited, supra, requires that I do not allow the substitution of a plaintiff in circumstances where that plaintiff’s cause of action is clearly barred. Accordingly, in the absence of any suggestion that the action is not barred, I refuse all the reliefs sought by the Liquidator in his Notice of Motion.

 

 

 

 

 

Sundogs Rock Productions Ltd -v- Timon

[2011] IEHC 475

 

Judgment of Mr. Justice Hedigan delivered on the 16th day of December, 2011.

1. On the 21st July, 2011 this Court refused the plaintiff’s claim against the defendant for the sum of €75,551.05. Arising out of that ruling the defendant now seeks:-

 

(a) An Order pursuant to Order 15, Rule 13 joining Francesca De Cataldo of Duncas, Killiney Hill Road, Killiney, County Dublin as a co-defendant in the above entitled proceedings, for the purpose of having an Order for costs made against her personally.

(b) Further, and/or in the alternative, an Order pursuant to Rule 53 of the Supreme Court of Judicature (Ireland) Act, 1877 directing that Francesca De Cataldo of Duncas, Killiney Hill Road, Killiney, County Dublin should be liable for the costs of the proceedings herein;

 

(c) An Order directing and requiring that the Plaintiff and/or Francesca De Cataldo remove from the Defendant’s premises the following items set forth in the Plaintiff’s invoice dated the 1st of August, 2008 ( of which items numbered 7,31,46, and 98 below were part delivered only):

 

2. Blue Antique Rug

 

3. Blue and Red Wool and Cotton Rug

 

4. Brass tall ashtray with glass top

 

5. Cooler Box

 

6. Gilded 4 seater 19th Century Couch

 

7. Real pine kitchen table and two long benches

 

8. Real pine kitchen dresser

 

9. 3 Double size goose feather duvets

 

10. Avoca wool blankets

 

12. Mirror only of an Art Craft dresser with Mirror and mother pearl inlay

 

15. 8 pillows in goose feather

 

16. Set of 5 pans same colour as kitchen dresser and kitchen table

 

17. Coffee maker

 

18. Electric coffee maker

 

19. Full set of cutlery

 

20. 2 Amethyst caves

 

21. 10 Goose feather cushions

 

23. Set of cups

 

24. Set of plates

 

25. 6 throws for sofas and beds

 

26. 6 bed covers (Double Bed size throw in Silk/Cotton)

 

27. 2 sets of matching cushions

 

28. 2 matching reproduction baroque mirrors

 

29. 2 seater white sofa

 

30. 2 seater gilded sofa

 

31. 4 terracotta soldier statute

 

33. Angel candles

 

34. 2 angels hand-made in ceramic

 

40. 1 large compost bin

 

41. Plates and cups for apartment

 

42. Large hand crafted elephant head

 

45. Hand crafted kitchen table

 

46. 3 Kitchen stools Hand craft mango wood

 

47. Elephant tower hand crafted wooden sculpture 2 ft high

 

48. Wooden frame hand crafted

 

52. Satellite dish

 

56. Crystal cluster lamp

 

57. 2 Bronze lamps

 

59. Hand crafted wooden candle holder

 

60. Laundry basket

 

61. New bedroom carpet 70% wool 30% acrylic 3.5 meters

 

64. Buddha mosaic lamp

 

66. Bathroom chrome radiator

 

67. Iron toilet paper holder

 

68. 2 Venetian Mirrors

 

69. 1 Venetian Mirrors 2 x 1.6m

 

72. Full set of cutlery and pans

 

89. Leather stool brown

 

91. Set of towels

 

96. 1 Tiffany style lamp

 

97. 1 small half moon table mahogany

 

99. 1 tall drawer with marble top

 

(D) Further or other relief;

 

(E) Costs.

 

2. The defendant’s motion for costs is grounded on an affidavit of Vallis Timon dated the 25th July 2011. A responding affidavit was filed by Francesca de Cataldo dated the 1st November, 2011. An additional affidavit was filed on behalf of Francesca de Cataldo dated the 5th December, 2011.
3. The first affidavit of Ms de Cataldo raises matters that are of a scandalous nature. She alleges the judge at the hearing, that is myself, is a friend of the defendant and had made his mind up in advance of the hearing. She alleges that as a result the entire hearing was unfair to her and biased. Needless to say, the allegation is completely untrue. Prior to his getting into the witness box I had never met the defendant either professionally or socially. My initial questions as to his unusual name should, I would have thought, made this quite clear. Had I any conflict in hearing this case I would have readily recused myself and taken the next case in the list. This completely groundless allegation seems consistent with the rather bizarre behaviour of the plaintiff throughout this case as set out in the courts judgment herein.

 

4. Bias on the part of a judge is of two distinct kinds. Subjective bias and objective bias. Subjective bias arises where there actually exists a direct conflict of interest on the part of the judge. This is very unusual because judges readily recuse themselves when necessary. The more usual ground is the second. Objective bias is where there exists grounds for a person to reasonably believe that there exists a conflict on the part of the judge. The second ground is all about perception. Where such a perception might reasonably be thought to arise, the judge should not sit in judgment in the matter.

 

5. The plaintiff has not objected to my hearing this particular application. However a question arises ipso facto from the allegation of bias made by the plaintiff in her first affidavit herein. Clearly the plaintiff, however groundlessly, has the perception that this judge is biased against her. I do not consider that there is any reasonable basis for this view but I think nonetheless that I ought to consider whether I should determine this costs application because, were I to find against her, there would be very grave financial consequences involved. It seems to me that the most practical way to resolve this question so as to avoid generating any further proceedings, is to refuse the application in the sure expectation that my decision will be appealed by the defendant. That appeal by the defendant will travel with the plaintiff’s appeal herein and may be determined by the Supreme Court after its decision in the substantive action. This is particularly so because the defendant’s application to join Ms de Cataldo as co-defendant is based upon facts already found by me in the judgment.

 

6. I shall therefore refuse the application insofar as relates to (a) and (b). In relation to (c) I will order that the items set forth therein be removed by Ms de Cataldo from the defendant’s premises by the 31st January 2012. Failing this the defendant should remove them himself and sell them by auction for the best price they can obtain. The balance due after deduction of cost of removal and sale should be held by the solicitors for the defendant pending the determination of the appeal herein and then either applied against any legal costs incurred or returned to the plaintiff Company as may be ordered by the Court.

 

 

 

Hall v Minister for Finance & ors

[2013] IESC 10

 

Judgment of Mr. Justice Fennelly delivered on the 20th day of February, 2013.

1. The Court has before it a motion brought by five persons, all Teachtaí Dála, who seek to be joined either as appellants or as notice parties to an appeal pending before the court. The application is made pursuant to Order 15, Rule 1 and/or Rule 13 of the Rules of the Superior Courts (S.I. No. 15 of 1986).
2. The appeal is taken by the appellant from the judgment of the President of the High Court delivered on 31st January 2013. In that judgment, the learned President dismissed the appellant’s challenge to the validity of the mechanisms or procedures whereby the first-named Respondent, the Minister for Finance (hereinafter “the Minister”), provided financial support to three financial institutions arising from the financial crisis which has engulfed the nation since 2008.

 

3. The appellant claimed that the Minister did not have the power to issue the so-called promissory notes, in a total sum of €30.6 billion, as consideration for the capital provided by the State to the former Anglo Irish Bank and Irish Nationwide Building Society (later both subsumed in the Irish Bank Resolution Corporation).

 

4. The appellant contended before the High Court that provision of financial support pursuant to s. 6(1) the Credit Institutions (Financial Support) Act 2008 constituted an appropriation of revenue or other public monies within the meaning of Article 17 of the Constitution, which was unlawful in the absence of a resolution of the Dáil. It was common case that there was no such resolution. In the alternative, if the Minister had such power, the appellant claimed that the section was unconstitutional.

 

5. The appellant had instituted the proceedings as a citizen. He is not a member of either House of the Oireachtas. The Minister and the other defendants pleaded in their defences that the appellant lacked the necessary locus standi to maintain the proceedings. The submission made on behalf of those defendants was that the appellant did not claim any loss, damage or prejudice over and above any other citizen: he was seeking to police Oireachtas procedures; his claim was that the rights of Dáil Éireann and its members had been by-passed by the failure of the Minister to seek a resolution of the Dáil in accordance with the constitutional provisions; such a claim, they submitted, could be maintained only by a member of the Dáil.

 

6. The learned President considered the authorities on the issue of the locus standi of persons to challenge government acts or the constitutionality of acts of the Oireachtas. He held that the appellant was endeavouring to assert a jus tertii, in effect by seeking to advance a case which should more properly be brought, and which might well yet be brought, by an individual member or members of Dáil Éireann. He pointed out that there were other suitable plaintiffs and no member of the Dáil was precluded from mounting the very challenge which had been brought by the appellant.

 

7. The learned President dismissed the appellant’s claim, on the ground that he lacked standing, and without ruling on the substantive issues. He did not rule on the validity of his challenge either to the lawfulness of the Minister’s acts or the constitutionality of the statutory provision on which he relied.

 

8. The appellant has served notice of appeal against the judgment of the learned President and the consequent order of the High Court made on 1st February 2013.

 

9. The scope of the appeal is crucial to the present motion. It has three aspects. In the first instance, the appellant asks this Court for a declaration that he has the requisite locus standi to pursue his claim. Success on this ground would thus reverse the ground on which the High Court dismissed his application. Secondly, he asks for an order, “if necessary, should this Court decline to determine the substantive issues absent a determination at first instance, remitting the matter to the High Court for determination of the substantive issues in the proceedings.” In this way, the appellant recognises that this Court, by virtue of its exclusively appellate jurisdiction, will rarely entertain on appeal an issue of law which has not been decided by the High Court.

 

10. In addition, however, the appellant invites the Court in what he describes as “the special circumstances of this case having regard both to the urgency and the public interests arising, to make such further or other order as ought to have been made in the High Court…” Assuming that the Court accepts that invitation, the appellant seeks declarations effectively granting him the relief which he had sought but which had not been determined in the High Court.

 

11. The five applicants are all members of Dáil Éireann. In that capacity they are indisputably endowed with the standing which counsel for the Minister persuaded the learned President was necessary to maintain the present proceedings. Each applicant has sworn a grounding affidavit from which it is clear that he or she is aggrieved at the fact that Dáil Éireann was not consulted about and had not approved the making and issuance of the promissory notes. Each applicant is motivated by a wish to see important issues raised in the proceedings determined and to avoid uncertainty and delay as well as to avoid further expensive litigation in the event that the substantive issues are not determined by reason of an issue of standing.

 

12. The appellant does not object to the applicants being joined with him as appellants or notice parties.

 

13. Counsel for the applicants fully accepted, at the hearing of the application, that, in the event that they are joined to the proceedings, they will not be permitted to advance any arguments other than those already put forward on behalf of the appellant in the High Court. More significantly, counsel also stated that the applicants would not seek to argue in this Court at the hearing of the appeal that the Court should grant the substantive reliefs sought in the High Court. That should not be seen as a concession. It accords with the apparent acceptance by the appellant that it is only in exceptional circumstances that this Court will entertain argument on appeal on issues not decided by the High Court.

 

14. In these circumstances, counsel for the applicants explained their objective, in the event that they are joined as parties to the appeal.

 

15. The first objective is that they wish to support the appellant by submitting that he, the applicant, has standing, as a citizen, without being a member of Dáil Éireann, to maintain the proceedings.

 

16. The second objective is that, in the event that this Court should dismiss the appellant’s appeal against the High Court finding of his lack of standing, the applicants will ask the Court to remit the entire matter to the High Court in order to determine the substantive issues.

 

17. Counsel submitted that the applicants, being elected members of the national parliament, one of the arms of government under the Constitution, have the requisite standing to argue in support of rights protected by the Constitution.

 

18. In considering the application, it should be noted, in the first instance that the application is made pursuant to Order 15 of the Rules of the Superior Courts. It is accepted, in addition, that the Court has inherent jurisdiction to join parties to an appeal when the interests of justice require it.

 

19. Rule 1 of that Order provides that all “persons may be joined in one action as plaintiffs in whom any right to relief in respect of or arising out of the same transaction or series of transactions is alleged to exist………………” This rule is primarily concerned with the commencement of proceedings. The more appropriate rule regarding the adding of new parties to existing proceedings is Rule 13, which provides, in relevant part:

 

“No cause or matter shall be defeated by reason of the misjoinder or non-joinder of parties, and the Court may in every cause or matter deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. The Court may at any stage of the proceedings, either upon or without the application of either party, and upon such terms as may appear to the Court to be just, order that the names of any parties improperly joined……be struck out and that the names of any parties, whether plaintiffs or defendants, who ought to have been joined, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions in the cause or matter, be added.”

20. While it is true that Order 125, Rule 1 defines the Court generally to mean the High Court, it is clear that this provision must be taken as applying, where necessary, to the Supreme Court. The absence of an equivalent power in the Supreme Court to add or strike out parties would leave an obvious lacuna in the power of this Court. The definitions in Order 125, Rule 1 are subject to the proviso: “unless there is anything in the subject or context repugnant thereto [i.e., to the Rules]. In addition, Order 58, Rule 8 provides that the “Supreme Court shall have all the powers and duties as to amendment or otherwise of the High Court………”
21. These rules do not directly address the question of joinder as party to an appeal of a person who has not, voluntarily or otherwise, participated in the hearing of the High Court. It is clear that the Supreme Court has inherent jurisdiction to join a party to an appeal at any stage where the justice of the case requires it. Adapting the language of Rule 13 to the joining of a party to an appeal it is clear that the purpose of the Rule is “to enable the Court effectually and completely to adjudicate upon and settle all the questions in the cause or matter be added.” The “cause or matter” is the appeal.

 

22. It is clear that it is necessarily only in exceptional circumstances that this Court will permit the joinder of a new party or notice party to an appeal. The jurisdiction of this Court is exclusively appellate. It has no jurisdiction hear a case at first instance. It follows that it will not, save in exceptional circumstances , hear arguments or decide issues that were not part of the proceedings in the High Court. It departs from these rules only in exceptional circumstances and where the justice of the case demands it. There are very few reported examples. (See Delaney & McGrath, Civil Procedure in the Superior Courts, 3rd Ed., (Dublin, 2012) from 6-33 to 6-41).

 

23. The best known case is O’Keeffe v An Bord Pleanála [1993] 1 I.R. 39. In that case, a challenge by way of judicial review to a decision to grant planning permission was brought in the High Court. The beneficiary of the grant of planning permission was not made a notice party and did not apply to be joined. The High Court made an order quashing the decision. An Bord Pleanála appealed. The grantee of the permission applied to be joined as notice party to the appeal. The Supreme Court permitted it to be so joined subject to the strict proviso that it could not advance any argument in addition to those which had been advanced by An Bord Pleanála, the appellant, in the High Court. In that case, the new party wished to argue in support of the decision of the appellant and in support of the High Court decision quashing it. If it succeeded, which it did, the decision of An Bord Pleanála would be upheld. No question of remittal to the High Court arose.

 

24. In the case of T.D.I. Metro Limited v District Judge Delap and others [2000] 4 I.R. 337, the Attorney General was permitted to intervene in an appeal by a local authority as notice party against a High Court decision holding that it did not have the power to bring a prosecution on indictment. But the essential ground for the joinder of the Attorney General was that he had a role in protecting the public interest in relation to the matter of the prosecution of offences. (see the judgment of Denham J., as she then was, at pages 344 and 345).

 

25. It is necessary to consider the present application in the light of the particular reasons advanced in the application and at the hearing. It is not in question and was not disputed on behalf of the respondents at the hearing of the motion that the applicants have a genuine and honest interest in the key question at the core of this litigation. That is whether the Minister is lawfully and constitutionally entitled to undertake liability on behalf of the State pursuant to the promissory notes.

 

26. At one level, the present application might be presented as a very simple one. The appellant failed in his case in the High Court essentially because he was not a member of the Dáil. The applicants are members of the Dáil. Their joinder can solve that problem. The equally simple answer might be that the applicants could have applied but did not apply to be joined as parties in the High Court. The problem is that the case is now at the appeal stage in this Court.

 

27. The question for this Court on the present application is whether the Court should exercise its jurisdiction to join as parties to the appeal persons who were not parties, and did not apply to be made parties, to the proceedings in the High Court. As is apparent from O’Keeffe v An Bord Pleanála, the Court will, in exceptional circumstances, permit the joinder of a party to an appeal whose own personal or financial interests are genuinely at stake on the appeal.

 

28. In this context, it is important to take account of the arguments advanced for the applicants.

 

29. The first argument on behalf of the applicants is that they wish to support the submission of the appellant that he has, as a citizen, and, therefore, that he had in the High Court, the locus standi requisite to maintain the proceedings. That is, of course, the appellant’s own case on appeal. It is a case which he will prosecute through his own counsel. It is a question of law. A legal argument depends on its merits. Its persuasiveness is unaffected by whether it is advanced by one person or by many. Thus the addition of the applicants as appellants adds nothing to the strength of the legal argument. On this point, the applicants have no interest over and above or different from that of the appellant himself. Indeed, insofar as their interest is different, that is precisely because, unlike the appellant, they have the standing which the learned President held to be necessary to be able to maintain the proceedings. Thus, the undoubted distinct standing and interest of the applicants as members of Dáil Éireann and as public representatives is irrelevant to the appellant’s argument on the appeal. It does not give them any standing to become parties to the appeal. Their position is sharply distinguishable from that of the holder of the grant of planning permission in O’Keeffe v An Bord Pleanála, which had a tangible economic property interest in the subject-matter of the appeal. Insofar as the first argument is concerned, the applicants are fellow citizens of the appellant, but no more. Unlike the Attorney General, they do not enjoy any special role or status under the Constitution or otherwise to protect the public interest in the proper interpretation and application of the law.

 

30. It should be added that, in the event that the appellant succeeds in his appeal against the finding of lack of standing made by the High Court, it seems inevitable that the proceedings would be remitted to the High Court to enable the appellant to ask that Court for a decision on the substantive issues. The problem of the appellant’s standing will have been resolved in the sense that it was not necessary for him to have been a member of the Dáil. At that stage, nonetheless, it would be open to the High Court, always within the range of its discretion, to join the applicants or any other appropriate parties to the proceedings. Whether they would be necessary parties to the proceedings at that stage would be a matter for the High Court.

 

31. The second argument of the applicants comes into play only in circumstances where the appellant fails in his appeal against the finding of his own lack of standing. In that event, the applicants, having been joined as parties to the appeal, would, it seems from counsel’s argument, seek to have the proceedings remitted to the High Court for a decision on the substantive issues. Since they, unlike the appellant, would have locus standi, they could continue the proceedings in the High Court. In that situation, the applicants would become substitutes for the appellant who would have failed in his appeal to this Court and would no longer be a party. Their joinder would not be in support of but in substitution for the appellant and, moreover, they would be substituted not for prosecution of the appeal in this Court (which would have failed) but for the further prosecution of the substantive proceedings in the High Court.

 

32. These difficulties are more than procedural. They are fundamental. On the hypothesis where the appeal would have failed, it is difficult to see that anything remains to be remitted to the High Court. Axiomatically, the appellant himself could not remain as party to the proceedings. To permit the applicants, in the capacity of added appellants, then to substitute themselves for the original, but now unsuccessful, appellant, not on the appeal, but to continue a proceeding in the High Court, to which they had never previously been party would be a proceeding without precedent. It would conflict with the principle that the Supreme Court should join a new party to an appeal under its inherent jurisdiction only exceptionally and so as to conflict as little as possible with its essentially appellate jurisdiction. Viewed in that light, the joinder of the applicants would not be, as envisaged by Order 15 Rule 13, be “necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions in the cause or matter” before the Supreme Court, namely the appeal, but for the purpose of providing a party with standing to the High Court proceedings. But those proceedings have already been determined at the present stage. In the future situation envisaged here, the appeal will have failed. It is impossible to justify an order of joinder of the applicants as parties to the appeal for that essentially ulterior purpose.

 

33. Something should, nonetheless, be said about the question of economy and efficiency advanced by counsel for the applicants. The applicants point to the fact that a hearing has taken place in the High Court at which evidence was presented and argument heard on the substantive issues. In the event, these issues were not decided simply because the appellant failed for what was held to be lack of locus standi. It is said, quite plausibly, that it would be a waste of resources both of the courts and of the parties if there had to be a duplicate or repetition of these procedures. That could happen, it is said, if the case had to be recommenced and reheard in the High Court following an appeal in which the appellant was unsuccessful. Presumably, so the argument would go, if he succeeded on his appeal, the case could be remitted for decision without further evidence or argument.

 

34. These are all cogent but not necessarily conclusive considerations. In the scenario, where the appellant failed in his appeal and the matter was remitted with the applicants as substitute plaintiffs, there would have to be wide-ranging agreements by new parties (apart from the defendants) to be bound by procedures to which they had not been parties. Such agreement is not to be excluded. I am sure the High Court would approach the matter in a constructive spirit.

 

35. However, I am satisfied that the present application does not come within the purpose of the Rules and is not one which should be granted. When properly analysed the essential purpose of the joinder sought is not participation in the appeal but in a possible future procedure, if the matter is remitted to the High Court. On the other hand, it should, in fairness, be said that the applicants have demonstrated the genuineness of their concerns by the mere act of bringing the application. However, for the reasons given, I would dismiss the application.

 

 

 

Hegarty v D & S Flanagan Brothers Ballymore Ltd & Ors

[2013] IEHC 263

 

JUDGMENT of Mr. Justice Birmingham delivered the 31st day of May 2013

1. Before the court is an application brought by the third named defendant which seeks to have him struck out as a defendant in the proceedings pursuant to O. 15, r. 14 of the Rules of the Superior Courts or in the alternative for an order pursuant to O.19, r. 28 of the rules of the Superior Courts striking out the proceedings as against him on the grounds that they disclose no reasonable cause of action and are frivolous and vexatious, or pursuant to the inherent jurisdiction of the court. Alternatively, an order is sought pursuant to O. 63, r. 9 of the rules setting aside the order of the Master of the High Court of the 20th June, 2012 joining the third named defendant as a party to the proceedings.

 

2. The background to the present application is that the plaintiff alleges that on or about the 2nd November, 1999 she entered into a building contract with the first named defendant which would see it construct a dwelling at 22 Hyde Court, Roscommon. The third named defendant, an engineer, was instructed in relation to the proposed development. It appears the instructions came from a company called Shellac Limited. Mr. Sean Flanagan who might be described as the principal of the first named defendant is also the principal of Shellac Limited. It appears that on 29th September, 1999 the third named defendant issued a Foundation Inspection Certificate in respect of the property and that on the 7th June, 2000 he issued a certificate of compliance with the planning permission.

 

3. The plaintiff took up residence in April, 2001 and in December of that year or January, 2002 she noticed cracks on the walls of the property but her initial assumption was that these were settlement cracks.

 

4. By reference to the pleadings it seems that the plaintiff has now been advised that there are significant defects in the property and specifically has been advised that the foundation was placed on unsuitable ground and the roof structure was insufficiently supported. An Equity Civil Bill was served upon the first named defendant in May, 2007. By order of the Roscommon County Registrar the second named defendant was added as a co-defendant in April, 2009 and was served with an Amended Equity Civil Bill. In December, 2010 the proceedings were transferred to the High Court by order of the Country Registrar. An order of the Master of the High Court on 4th March, 2011 adopted the proceedings as if the action had commenced in the High Court by Plenary Summons. By order of the Master of the High Court on the 20th June, 2012 the third named defendant was joined to the proceedings as a co-defendant. In the course of an affidavit sworn by way of response to the motion now before the court, the plaintiff contends that she was unaware that the third named defendant had certified the foundations of the property until the foundation certificate was made available as part of the discovery process on the 24th January, 2012. Proceedings were served upon the third named defendant which claimed that the Inspection Certificate which stated that the foundations were in substantial compliance with the Building Regulations 1997 and adequate for the purpose for which they were intended was issued negligently and/or in breach of duty including breach of statutory duty. So far as the certificate of compliance of planning permission is concerned it is pleaded that the plaintiff relied on the certificate. Damages are claimed against the third named defendant for negligence and/or breach of duty including breach of statutory duty and/or misrepresentation.

 

5. In the course of the affidavit sworn by the plaintiff she makes the case that the limitation period in respect of her claim did not begin to run until the date of knowledge of the certificate; the 24th January, 2012.

 

6. The first matter that requires consideration is whether the procedure that has been adopted is appropriate. The general position is that a party may be joined as a defendant even in circumstances where there are issues as to whether any claim would be statute barred. Generally speaking the Statute of Limitations is a matter of defence. However different considerations arise where a claim is clearly and manifestly statute barred. The issue was considered in the case of Hynes v. Western Health Board [2006] IEHC 55 (Unreported, High Court, Clarke J., 8th March, 2006). There, Clarke J. commented as follows:-

 

“3.2 I have come to the view that the general proposition, to the effect that a defendant can be joined in proceedings notwithstanding there being issues as to the applicability of the statute to his case, is subject to an exception that the court retains a discretion not to join a defendant where the statute would clearly apply and where in the words of Budd J. [O’Reilly v. Granville [1971] I.R. 90] the joining of such a defendant would be “futile”.

3.3 It would, it seems to me, be inappropriate for a court to impose upon parties (and indeed the court itself) the burden of dealing, in a wholly unnecessary way, with a number of applications and hearings where the end result of all such applications would necessarily mean that the case against the individual concerned would be dismissed as being manifestly statute barred. A contrary view would, it seems to me, be inconsistent with the policy inherent in the jurisdiction of the court to dismiss a manifestly ill-founded cause of action as identified in Barry v. Buckley [1981] I.R. 306.

 

3.4 I am, therefore, satisfied that the court should not, in a clear case, join a defendant where it is manifest that the case as against that defendant is statute barred and where it is also clear that the defendant concerned intends to rely upon the statute.

 

3.5 However I am also of the view that O’Reilly v. Granville is authority for the proposition that the court should not enter into an inquiry as to whether a claim may or may not be statute barred on the hearing of a procedural motion seeking to join a defendant (or, as here, where a defendant having been joined seeks by a similar procedural motion to have the earlier order set-aside). On that aspect of the matter the only question which the court should ask itself on such an application is as to whether the claim as against the defendant concerned is clearly statute barred. If there is any doubt whatsoever about that fact, then the defendant should be joined, if it is otherwise appropriate so to do, and the issue of the claim being or not being statute barred should be dealt with the in the ordinary way as appropriate to the circumstances of the case including, if so appropriate, by means of a preliminary issue.”

 

7. Similarly, the Supreme Court in O’Connell v. The Building and Allied Trades Union [2012] IESC 36 (Unreported, Supreme Court, 12th June, 2012) came to a similar conclusion with MacMenamin J. stating at paragraph 36:

“a co-defendant can be joined in proceedings, notwithstanding there being an issue as to whether the statute of limitations applies to his or her case [but that] the court retains a discretion not to join a defendant, but only where the statute would very clearly apply, or where, in the words of Budd J., the joinder of such a defendant would be futile.”.

8. In this case there is no doubt that the third named defendant intends to rely on the statute of limitations. The question therefore is whether the claim against the third named defendant is clearly and manifestly statute barred and whether there are any circumstances which would prevent the third named defendant from relying upon the statute. Counsel for the third named defendant says that the limitation period began to run either on the date on which the plaintiff relied on the planning certificate, which was the 2nd November. 1999 or, at the very latest, when damage manifested in December, 2001/January, 2002. The plaintiff has relied on the decision of Herbert J. in O’Donnell v. Kilsaran Concrete [2001] 4 IR 183. However, I do not believe that case assists the plaintiff as Herbert J. did not find it necessary to express an opinion on what he described as the “vexed question of discoverability” because he concluded that the property damage in question was attributable to an excess of iron pyrites in the construction blocks and was of recent origin, having come into existence not long prior to October, 1998, in a situation where the plenary summons was issued on the 4th June, 1999, which was well within the limitation period.
9. In the present case there is no basis for concluding that damage was not manifest by December, 2001/Janaury, 2002. All the authorities in this area were reviewed by Dunne J. in Murphy v. McInerney Construction Limited and James Griffin [2008] IEHC 323 (Unreported, High Court, Dunne J., 22nd October, 2008). Having conducted that exercise she observed as follows:-

 

“I find it difficult to come to any conclusion other than that the question of a discoverability test simply does not arise. It is quite clear from the authorities referred to above that a discoverability test does not avail a plaintiff when dealing with a plea that a claim is statute barred under Irish Law”.

10. In Irish Equine Foundation Limited v. Robinson [1999] I.R. 442, Geoghegan J. was dealing with the construction of an equine centre where a final certificate had issued in November, 1987 and proceedings were issued in January, 1996. The plaintiffs claimed that as there had been no manifestation of damage until the leaks occurred the limitation period only ran from that time. However, it was held that the defects in the building could have been detected by experts at any stage after the construction of the building. The defects had manifested themselves from the time the building had been erected and the statutory period commenced from then.
11. Geoghegan J. commented as follows:

 

“It is obvious from those dates that the action in contract is clearly statute barred. It is trite law that the limitation period commences on the date of the breach of contract and not on the date when the damage is caused. In other words, a breach of contract per se gives rise to a cause of action. The only question which I have to consider, therefore is whether the action in so far as it is founded on tort, (i.e. the tort of negligence) is likewise statute barred. The contention of the plaintiff is that there was no damage, or at least no damage manifested itself, until the ingress of water through the ceiling of the centre in late 1991. If the period commenced on that date then, quite obviously, the action in so far as it is founded on tort is not statute barred.

It is common case that discoverability, as such, cannot be relevant in considering what is the appropriate commencement date in respect of the limitation period. On this point at least, the view of the House of the Lords taken in Pirelli v. Oscar Faber and Partners [1983] 2 A.C. 1, represents Irish Law also. This is quite clear from the decision of the Supreme Court in Hegarty v. O’Loughran [1990] 1 IR 148, even though that particular case dealt with personal injuries and not damage to a building. The reasoning contained in the several judgments in Hegarty v. O’Loughran and the criticism voiced of the decision of Carroll J. in Morgan v. Park Development [1983] I.L.R.M. 156, indicate beyond doubt that the Supreme Court rejects the discoverability test no matter what the nature of the damage claimed is.”

 

12. In my view the case law in this jurisdiction points to a very clear, albeit very harsh, conclusion. The time-limit on negligence actions begins to accrue on the date on which damage manifests itself, and not from the date on which the damage is discovered. In laying out this principle, McCarthy J. in Hegarty v. O’Loughran states at page 164:

“The fundamental principle is that words in a statute must be given their ordinary meaning and, for myself, I am unable to conclude that a cause of action accrues on the date of discovery of its existence rather than the date on which, if it had been discovered, proceedings could lawfully have been instituted. I recognize the unfairness, the harshness, the obscurantism that underlies this rule, but it is there and will remain there unless qualified by the legislature or invalidated root and branch by this court.”

The above passage illustrates that counsel for the third named defendant was correct in claiming that the time limit for taking an action against his client ended in January 2008 at the latest.

It is clear from the above cases, and particularly in Hynes v. Western Health Board and in O’Connell that a court ought to consider two main questions when hearing a motion to join a party as a defendant. Those questions, as seen at paragraph 38 of O’Connell. are:

 

1. i) Whether the claim as against the intended defendant is “clearly and manifestly statute barred”, and
2. ii) Whether “there are no circumstances in which the intended defendant would be debarred either in law or equity from relying upon the statute”

 

In considering the facts and the legal submissions, both the above questions can be answered in the affirmative. As the claim against the third named defendant is clearly statute barred I will grant the relief sought.

13. In my view, it is indeed clear or manifest that the claim is statute barred. On the view of the facts most favourable to the plaintiff, the cause of action accrued in January, 2002, but the proceedings against the third named defendant were not commenced until 20th June, 2012, more than ten years later. As the issue of discoverability does not arise, it is clear that the claim is statute barred. It would be to do a disservice to the parties to decline to make the orders sought by the moving party now and instead to compel a further application. Accordingly, I will make the orders sought by the third named defendant.

 

 

Dowling & ors v Minister for Finance

[2013] IESC 58

 

Fennelly J

19. On 3rd August 2011 there was issued in the High Court the Notice of Motion which initiated the proceedings now pending before that Court. It is accepted that the respondents are the applicants in those proceedings. Some early procedural issues were resolved and are not before this Court. The Notice of Motion issued by the respondents seeks the setting aside of the direction order pursuant to s. 11 of the Act.

 

20. The Notice of Motion was grounded on an affidavit of the same date sworn by the second-named the respondent, though almost all subsequent affidavits have been sworn by Mr. Skoczylas. The grounds advanced in the affidavit are that the opinion of the Minister was unreasonable and was not necessary to secure the achievement of the purposes of the Act. It is claimed that the Act is unconstitutional, though there are now separate constitutional proceedings pending in the High Court. The affidavit also says, inter alia:

“The recapitalization………… which was effected via the Direction Order was not necessary. The Company, including its banking operations, was– before the implementation of the Direction Order– fully viable and had substantial equity value. Before the implementation of the Direction Order, PTSB had a strong capital position and adequate funding position.

 

the Prudential Capital Assessment Review… and the Prudential Liquidity Assessment Review… stress tests, upon which the… recapitalisation requirements were set, were unduly excessively pessimistic and imposed artificially high and unnecessary capital requirements…. which had hardly anything to do with the real capital needs.

 

the dilutions of the ownership of the shareholders effected by the Direction Order was greatly excessive and not commensurate with the capital contributions which are being made by the Company……The Minister’s actions have been arbitrary and the shareholders’ rights have been abrogated without any consultation.

 

the Direction Order was imposed and implemented under false pretences and there was no genuine urgency or emergency regarding the [Company’s] recapitalization.

 

practical alternatives to the Direction Order existed which would have safeguarded the Government’s investment and protected the Irish taxpayers…..”

21. By Notice of Motion dated 10th October 2012, the appellants applied in the High Court for an order that they be joined as Notice Parties to the proceedings. The respondents opposed the application.

 

22. Charleton J., in his judgment of 21st February 2013 noted the argument of the appellants that that they have a vital interest in ensuring that the direction order is not overturned, claiming that it was right and that they said that they needed to participate with a view to ensuring that whatever other order might be made by the High Court would be tailored to their particular circumstances. He posed for himself the question “whether the submissions of [the Company or the Bank] were needed on any issue for the court to reach a just and complete adjudication.”

 

23. He then made the following observation:

“It must be remembered that the holding company voted against this scheme in general meeting. Now, under a new regime, it and the bank seek to come in and support the lawfulness of what subsequently happened. It is difficult to accept that it is logical for both companies to claim the right to appear as notice parties and to argue in support of the Minister that the direction order was properly granted in the first place. In doing so, they would be in effect acting as co-defendants, because that is what happens in public law challenges, and were this Court to make an unlimited order allowing them participation, that joinder of parties would take place a year and a half after the direction order was made, in circumstances where the holding company had opposed the proposal in general meeting and where the Act of 2010 specifies urgency and efficiency in the disposal of ensuing litigation.”

24. In a further passage, the learned judge proceeded:

“In that context, there is no need, and there is no benefit to be gained by the Court, from these parties attending the hearing and backing up the contention of the Minister that the direction order was correctly made in the first place. They have claimed that their presence is necessary. That proposition is illogical. The Act of 2010 allows the Minister to override private arrangements and to bypass company law for the purposes of saving a financial institution. Through the holding company this financial institution, apparently, either did not want to be saved or believed that salvation lay elsewhere. It is entirely the business of the Minister as to whether he acted correctly. An argument is made that the financial institution and its holding company would be able to supply vital information to the Court by way of background to the order being made. That, of itself, cannot be a sufficient reason for joinder. Litigation is about finding the truth. All the rules of court do is to provide a fair means towards that end consistent with the need to manage that process.”

25. The learned judge qualified this conclusion by accepting that there was one respect in which the participation of the Bank and the Company was necessary. He said that, if the applicants were to “show an error of procedure such as to vitiate the direction order, an unreasonably held opinion by the Minister or an error of law in the sense needed to overturn that order under s. 11(3), the High Court has two choices; the order may be overturned or another order may be substituted for it. In effect, it is possible for the Court to be faced with substituting a new order.” He then quoted s. 11, subsections (4), (5) and (6) of the Act.

 

26. On foot of that judgment the High Court order provided “that the Company and the Bank be joined as Notice Parties to the within proceedings entitled to swear affidavit evidence of testimony challenge testimony or affidavit evidence and proffer submissions in that part of the substantive hearing and that part alone as deals with their current financial situation and as deals with what Order ought to be substituted should the Direction Order be impugned”. The effect of that order is to permit the appellants to participate in the proceedings but to a limited extent. The parties agree that it does not permit them to enter into the question of whether the Direction Order should be set aside or even to argue about the effect of such an event.

 

27. The appellants, in their notice of appeal, argued that the learned High Court judge was in error in limiting their participation in the manner described and in particular:

in failing to have any or any adequate regard to the potential direct adverse effect of the setting aside of the Direction Order on their interests;

 

in applying an incorrect test, namely whether the submissions of the appellants were needed on any issue;

in finding that it was not logical for the appellants to claim the right to appear and to make submissions consistent with the position of the Minister;

in failing to have regard to the fact that the appellants had been joined as Notice Parties in a related challenge to the Direction Order;

 

in finding that there had been any delay on the part of the appellants.

28. Just as it was a matter, in the High Court, for the appellants to demonstrate grounds on which an order should be made joining them as Notice Parties, they must show to this Court that the High Court was in error insofar as it failed to permit them to be admitted to the proceedings as Notice Parties without any restriction. I propose, therefore, to consider, in the first instance the legal principles governing this matter.

 

29. Looking at the matter from the point of view of principle and, without reference to the applicable Rules governing the joinder of parties, it is clear that the position is significantly different depending on whether the proceedings are purely civil and private or whether they concern issues of public law. In civil litigation, generally speaking, parties are allowed to choose whom they wish to sue. In matters of public law persons other than the public authority may have a real and substantial interest in the outcome. The simplest example is the planning permission. While the judicial review must of necessity be sought on grounds that the planning authority or An Bórd Pleanála on appeal has committed an error of law affecting the validity of its decision, any decision of the court is very likely to affect the very real rights and interests of private persons or corporations. The holder of a planning permission is, of course, potentially affected by the outcome of an application for judicial review of its validity. Civil and public-law proceedings are not, however, in completely watertight compartments. There is an underlying principle that a person is entitled to participate in proceedings which are capable of adversely and directly affecting his or her substantial interests.

 

30. The joinder of parties in civil proceedings is governed by Order 15, Rule 13 of the Rules of the Superior Courts, which provides:

“No cause or matter shall be defeated by reason of the mis-joinder or non-joinder or parties, and the court may in every case or matter deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. The court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the court to be just, order that the names of any parties improperly joined, whether as plaintiffs or as defendants, be struck out and that the names of any parties, whether plaintiffs or defendants, who ought to have been joined, or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added.” (emphasis added)

31. This Court considered the application of that Rule in Barlow v Fanning [2002] 2 IR 593. The litigation in that case arose from a dispute in the economics department of a university. The plaintiffs, who were members of the staff originally sued the university as well as a professor against whom they made most of their complaints. They discontinued the claim against him and intended to continue against the university alone. The professor applied to be joined again as a defendant. Keane C.J. cited authority, in particular the speech of Viscount Dilhorne in Vandervell Trustees Limited v White and ors [1971] AC 912, to the effect that Order 15 Rule 13 requires that the presence of the party to be joined is necessary to enable the matters in dispute to be effectually and completely decided, that a plaintiff is entitled to choose the defendants he wishes to sue, but that the court has power to add a party whose proprietary or pecuniary rights are or may be directly affected by the proceedings.

 

32. Keane C.J. approved the judgment of Lynch J in Fincoriz S.A.S. Di Bruno Tassin Din e C v. Ansbacher & Co. Ltd. (Unreported, High Court, 20th April, 1987). That case involved rival claims to a sum of money deposited in a bank. The applicants who wished to be joined had obtained an injunction in separate proceedings restraining the release of the funds. The plaintiff in the action pending before Lynch J had brought the action claiming rights in the same fund. Lynch J said:

“ in order that a person may be joined as a Defendant without the consent and, a fortiori, against the wishes of the Plaintiff there must be some exceptional circumstances. The exceptional circumstances must be such that the added Defendants or persons who ought to have been joined as Defendants by the Plaintiff in the first instance or alternatively even if it was not unreasonable that they were not joined as Defendants by the Plaintiff in the first instance it is shown at the time of the application to the Court that their presence before the Court will as a matter of probability be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all questions involved in the cause or matter.”

33. Lynch J found that such circumstances were present in the context of two rival claims to the same bank deposit. Keane C.J., in Barlow v Fanning, approved the test adopted by Lynch J that “there must be exceptional circumstances before a person could be joined as a defendant against the wishes of the plaintiff…” He acknowledged that the good name and reputation of the professor who was seeking to be joined might be adversely affected, since, for the most part, the establishment of the plaintiffs’ case against the university would necessitate the proof by them of damaging allegations against the first defendant. That, however, was not a sufficient exceptional circumstance, recalling that, in cases of vicarious liability generally, such as in road traffic cases, an action might be brought against the owner of a vehicle without joining the driver. The conclusion from all his is that a person must demonstrate exceptional circumstances in order to persuade a court to join him or her in an action against the will of the opposing party. The special circumstances must consist in some real or apprehended adverse effect on his proprietary interests. Reputational damage would not suffice. Nor would the fact that the case will lead to a decision on a point of law which could adveresly affect the applicant in other litigation.

 

34. In the case of judicial review, Order 84 of the Rules of the Superior Courts contains very different provisions. It makes express provision for ensuring that persons directly affected are put on notice of proceedings. The fundamental requirement is in Order 84, r. 22(2) which imposes an express obligation on the applicant to see to it that the “notice of motion or summons must be served on all persons directly affected…” This is reinforced by two additional provisions:
35. Order 84, r. 22(6) provides:

 

“If on the hearing of the motion or summons the Court is of opinion that any person who ought, whether under this rule or otherwise, to have been served has not been served, the Court may adjourn the hearing on such terms (if any) as it may direct in order that the notice or summons may be served on that person.”

1. Order 84, r. 26(1) provides:

 

“On the hearing of any motion or summons under rule 22, any person who desires to be heard in opposition to the motion or summons, and appears to the court to be a proper person to be heard, shall be heard, notwithstanding that he has not been served with notice of the motion or the summons.”

35. The most relevant authority for the purposes of the determination of the present appeal is BUPA Ireland Ltd. v. Health Insurance Authority [2006] 1 IR 201, where this Court considered both the judicial review Rules and those applicable to civil actions. That case concerned judicial review proceedings brought by a health insurer, BUPA. BUPA wished to challenge the implementation of the scheme of Risk Equalisation under the Health Insurance Act, 1994. Implementation of the scheme would have resulted in the payment by other health insurers, including BUPA, of very substantial sums to the Voluntary Health Insurance Board (“VHI”). The case had an unusual procedural history. Initially, BUPA had sought judicial review of a recommendation made to the Minister for Health and Children by the Health Insurance Authority (“HIA”). In the same judicial review proceedings it challenged the constitutionality of the underlying legislation and its compatibility with EU law. The HIA recommendation was not accepted by the Minister so the issue of its validity became moot. The proceedings continued but were limited to an attack on the legislation as being both unconstitutional and contrary to EU law. That change persuaded the High Court that it was no longer a judicial review and it struck out VHI as a notice party. VHI appealed. VHI sought the status of notice party to the proceedings because, it claimed, it was the party entitled to receive the greater part of any funds which would become available as a result of payments directed by the Minister under the Scheme. This Court decided to restore VHI as a notice party.

 

36. The judgment of this Court was delivered by Kearns J. It is clear from a reading of that judgment that the Court was of the view that VHI ought to be permitted to remain as a notice party regardless of whether the proceedings were treated under the Rules relating to judicial review or those concerning civil actions. Firstly, Kearns J held that it was “clear beyond question that the present proceedings have at all times been judicial review proceedings and continue now as such.” He cited the provisions of the Rules set out at paragraph 34 above. He referred to the decisions of this Court in O’Keeffe v An Bórd Pleanála [1993] 1 I.R. 39 and Spin Communications T/A Storm F.M. v. Independent Radio and Television Commission (Unreported, Supreme Court, 14th April, 2000).

 

37. The learned judge concluded that those “cases demonstrate that where a party has a “vital interest in the outcome of the matter” or is “vitally interested in the outcome of the proceedings” or would be “very clearly affected by the result” of the proceedings, it is appropriate for that party to be a notice party in the proceedings.” That passage must not be misunderstood as laying down a test in the terms used by Kearns. What it says that is that it is appropriate to join a party in the circumstances mentioned. Order 84, Rule 22(2) imposes an obligation to notify “ all persons directly affected…”

 

38. O’Keeffe v An Bórd Pleanála was notable because the beneficiary of the planning permission had abstained from participation in the High Court proceedings. It had not been served with the proceedings but had been notified of them by letter. It had not applied to be joined in the High Court, but had applied to be joined as a notice party only at the stage of the appeal. Finlay C.J. was commenting on the omission to serve that party when he remarked, perhaps obiter, at page 78:

“If application is made for liberty to issue proceedings for judicial review and the claim includes one for certiorari to quash the decision of a court or of an administrative decision-making authority the applicant must seek to add as a party any person whose rights would be affected by the avoidance of the decision impugned. If liberty is granted the court should except for special reasons ordinarily add such person as a party.”

 

I would interpose the word “directly” before “affected” in that passage.

39. This Court, in BUPA, was primarily of the view that the judicial review rules provided the framwork for the decision and that the High Court judge in that case had been mistaken in considering the matter in the light of Order 15, Rule 13 and the decision in Barlow v Fanning, cited above. It concluded, nonetheless, that, even if Order 15 were to be treated as applicable, VHI should still be joined because the Court was “strongly of the view that this case does involve exceptional circumstances and that the continued presence of the notice party in the proceedings is “necessary in order to enable the court effectually and completely to adjudicate upon and settle all questions involved in the cause or matter”.”(page 214)

 

40. The judgment of Clarke J in Yap v. Children’s University Hospital Temple Street Ltd. [2006] 4 IR 298 explains the relevance of the distinction between public-law and purely private civil proceedings. Referring specifically to the BUPA case, he noted that VHI had been “directly affected by any order that might be made by the court.” At paragraph 22, he continued:

“For example if a regulatory authority makes a decision in proceedings between two entities, and one of those entities challenges the decision because it was unfavourable, if the court is persuaded that the determination of the regulatory authority should be upset, then that decision has a direct effect upon the party who had secured the favourable decision in the first place and therefore that party must be joined as a notice party because the order itself (rather than collateral matters such as the reasoning of the court or comments which the court might make on the facts) affects the interests of that party.”

41. The proceedings in the present case are not, of course, brought by way of judicial review in the formal sense. Order 84 is concerned principally with the traditional remedies of certiorari, mandamus, prohibition and quo warranto, mentioned in Order 84, Rule 18. Section 11 of the Act of 2010 lays down the procedure for applying to set aside a direction order and prescribes the grounds upon which relief can be granted. The application itself is for the setting aside of a Direction Order. The procedure is by way of notice of motion grounded on affidavit. Section 11(3) provides that the court may set aside the Direction Order “only if it is of the opinion that there has been non-compliance with any of the requirements of section 7 or that the opinion of the Minister under section 7(2) was unreasonable or vitiated by an error of law.” The Direction Order, it is true, was technically made by the Court. However, in reality the Court was endorsing the proposed direction order adopted by the Minister and it is the correctness of the Minister’s actions, not those of the Court which are in issue.

 

42. I am satisfied that the application to set aside a Direction Order has all or almost all of the indicia of an application for judicial review. It has few, if any, of the characteristics of a civil action. If a choice were to be made between the application of Order 15 and Order 84, the latter would have to apply. Since the Act is silent on the matter and s. 11(2) provides the only guidance by saying that the court “may give such directions with regard to the hearing of the application as it considers appropriate in the circumstances,” it seems to me that order 84 must be applied by analogy. It follows that an applicant for an order pursuant to s. 11 should serve the notice of motion and grounding affidavit on “all persons directly affected…”

 

43. The appellants, in the first instance, submit that the learned judge adopted the incorrect test when deciding whether to join the appellants. The test is not whether the submissions are needed by the court in order to arrive at a decision. This is not the test adopted in the cases, particularly BUPA. The test is related to the effects on the interests of the party seeking to be joined. They also challenge his view that it was not logical for the appellants to apply and that they had been in delay.

 

44. The court has before it a vast volume of material concerning the issues, actual and potential arising in the case. For the purposes of this decision, it seems to me that a brief summary is sufficient. Counsel for the appellants summarised the arguments in favour of their being joined by emphasising that the application is for the setting aside of the Direction Order under which capital amounting to some €2.7 billion was subscribed to the Bank. He says that the application to set aside would at the very least create uncertainty for the Bank with consequences which could be enormous. Without the capital provided by the Minister, the Bank would not, he argued, be viable. The essence of and central focus of these arguments is on the fact that the capital was paid to the Bank and the consequence of the setting aside of the Direction Order which provided the basis for that payment. Counsel made the following points:

a consequence of the setting aside of the Direction Order is that, putting it at its lowest, there is an “at least theoretical” possibility that the capital might have to be repaid; although the respondents insist that they are not seeking such relief, that result could follow, even if not sought;

if the conditions laid down in the Direction Order for the subscription of the capital were to be changed, the Minister might possibly seek the return of the money;

the result of any order setting aside the Direction Order might be that the State would not be in compliance with the conditions under which State Aid approval had been given and the result might be that the State Aid had been unlawfully given and might have to be repaid;

 

Under a Placing Agreement entered into by the appellants with the Minister and the National Treasury Management Agency, as one of the conditions of the Direction Order, the Company is required to indemnify various parties, including the Minister, from and against any and all losses or claims incurred by him, including sums which might be payable by the Minister in the event that the Applicants are successful in these proceedings.

If the direction order were to be set aside a question would arise as to whether the Central Bank, the body which had insisted on the need for the recapitalisation would accept that it had been properly done.

45. The respondents have vigorously and with great tenacity opposed the attempt of the appellants to be joined in the proceedings as notice parties or at least, as notice parties free of the restrictions imposed by the order of the High Court. They have not appealed against the grant of those limited rights. Mr. Skoczylas presented these arguments and displayed highly impressive command of a wide range of materials of law and fact. There are three main threads to the respondents’ opposition:

The purpose and intended effect of the Direction Order is to revoke the decisions of the EGM of the company of the 20th July 2011, an action which is incompatible with provisions of Irish company law which implement EU law;

there is no possibility in any circumstances of the repayment of capital arising, whatever the outcome of the proceedings: neither the Company nor the Bank, therefore, had any interest to defend;

there has been delay, amounting to unfairness, by the appellants in making the application, particularly considered in the light of the very strict time limit imposed on the respondents.

46. The first two of these lines of argument are intimately connected with the substantive issues in the underlying case. It is important, therefore, not to reach any final conclusions on those issues.

 

47. In making the first point, Mr. Skoczylas complains that the Direction Order, having been made in the terms of the proposed direction order of the Minister was made for the purpose of revoking the decisions of the EGM of 20 July 2011. Those decisions included one whereby the shareholders voted by an overwhelming majority to oppose the terms of the Minister’s proposal. The Company is incapable of acting in contravention of the EGM decisions. The Direction Order is incapable of overriding those decisions. To do so would be directly contrary to the terms of Article 10 of the (codifying) Directive 2009/101/EC of the European Parliament and of the Council of 16 September 2009 on coordination of safeguards which, for the protection of the interests of members and third parties, are required by Member States of companies within the meaning of the second paragraph of Article 48 of the Treaty, with a view to making such safeguards equivalent. The respondents refer to the following provisions:
48. Article 10 provides: “Acts done by the organs of the company shall be binding upon it even if those acts are not within the objects of the company, unless such acts exceed the powers that the law confers or allows to be conferred on those organs.
49. That principle is implemented in Irish law by Regulation 6 of the European Communities (Companies) Regulations, 1973 (S.I. No. 163 of 1973, which provides:

 

“In favour of a person dealing with a company in good faith, any transaction entered into by any organ of the company, being its board of directors or any person registered under these regulations as a person authorised to bind the company, shall be deemed to be within the capacity of the company and any limitation of the powers of that board or person, whether imposed by the memorandum or articles of association or otherwise, may not be relied upon as against any person so dealing with the company.”

48. While the respondents referred to what they call a “whole plethora of provisions of EU law,” which, in the main proceedings, they accuse the Minister of violating, the essence of this argument, as presented on this appeal, is that the Court should not permit the appellants even to appear in the action since to do so would involve acting in violation of EU law.

 

49. The second point made forcibly by Mr. Skoczylas is that, contrary to the submission of the appellants, there is no possibility whatever that the recapitalisation funds will have to be repaid. Those funds must stay in the recapitalise relevant institutions. This is required by the EU Implementing Decisions 2011/77/EU and 2011/326/EU. Mr. Skoczylas refers to provisions of those Decisions referring to the requirement that Ireland should have recapitalise its banks in accordance with the findings of the Central Bank of Ireland of 31 March 2011.

 

50. In the third line of argument, the respondents criticise the delay by the appellants in making the application to be joined. They point to the time limit of five working days which was imposed upon them and complain that a different standard, no time limit, would be applied to the appellants.

 

51. Apart from those three main lines of argument, the respondents resist the attempt, as they see it, by the appellants to assist the State in defending the very court proceedings in which the respondents themselves claim that the state has unlawfully and effectively taken over complete control of the Company and the Bank.

 

52. In resolving the issue on this appeal, I start from the conclusion I have already expressed that the appropriate test to apply is by analogy with Order 84 of the Rules of the Superior Courts. I do so because an application made under Section 11 of the Act is both in form and in substance essentially a form of judicial review of the decision of the Minister. It follows that any person or body which is “directly affected” should be joined. To begin with, any such person or body should be served with the proceedings. If that has not been done, an order joining him, her or it should be made. Finlay C.J. expressed the matter briefly and clearly in his judgment in O’Keeffe v An Bórd Pleanala.

 

53. It seems to me obvious, at least prima facie, that the body most likely to be directly affected by the setting aside of a Direction Order is the “relevant institution” in respect of which the order must necessarily have been made. Section 11 itself recognises this by limiting the right to make an application to the “relevant institution” or a member.

 

54. At this point, I must pause to say that, with great respect, I do not agree with the view of Charleton J that the question to be asked is whether the submissions of the party applying to be joined “are needed on any issue for the court to reach a just and complete adjudication.” It follows that I also disagree with his conclusion that there was “no benefit to be gained by the Court, from these parties attending the hearing and backing up the contention of the Minister that the direction Order was correctly made in the first place.” That is not the correct test. An interested party, i.e. a party directly affected, is, in my view, entitled to be represented to defend his or its interests, even if the decision-maker is there to advance the same arguments. The matter was expressed by Keane C. J. when giving judgment on a question of costs in Spin Communications T/A Storm F.M. v. Independent Radio and Television Commission (Unreported, Supreme Court, 14th April, 2000):

“This is a case in which the notice party, as indeed the High Court Judge accepted, is a party with a vital interest in the outcome of the matter. As Finlay C.J. said in O’Keeffe v. An Bord Pleanála , where you have a party such as the notice party in the present case who is vitally interested in the outcome of the proceedings, they must be joined as a party and will be joined by the court if the applicant does not join them. In those circumstances, it seems to me that, once the notice party is there, once he is in the proceedings protecting his interests, he may find himself in precisely the same position as the respondent. He may find himself in the position that he has been there, of necessity, to protect his interests, to advance arguments that may not have been advanced by the IRTC and to have had the benefit of his own counsel and solicitor to protect his interests. It would be quite unjust that he should have to pay his costs because the applicant company has no assets, where he has been brought there as a necessary party.”

As that passage explains with the clarity characteristic of its author, a party with a direct interest in an administrative decision is entitled to have his own case put to the court by his own counsel independently of the defence made on behalf of the decision maker. That is his right. It does not depend on the court’s view as to whether it finds it necessary to hear the party. Naturally, it often happens in practice, usually to save costs, that a notice party will choose not to make independent arguments and to rely on the principal respondent to defend the case. But that is his decision to make.

 

55. I turn then to address the two principal grounds upon which the respondents base their opposition. The first is that, put briefly, it is impossible for the appellants to speak for the Company or the Bank. Because of the EGM resolutions, only the respondents can lawfully do so. The second is that, whatever the appellants say, there is absolutely no possibility of a question arising as to the repayment of the capitalisation funds. Both of these points encounter what I consider to be an insuperable objection. They involve the Court in reaching a final conclusion on this interlocutory motion in advance of the hearing of the main proceedings on two issues which are precisely in contention in those proceedings. Firstly, the proposition that the resolutions passed at an EGM of a company enjoy such binding effect in national and, even more so, in EU law, that it is legally impossible for the Company, even under the compulsion of a subsequent law given effect by a court order is at the heart of the proceedings themselves. The point is based on Article 10 of a Directive which has been implemented in Irish law in the manner set out above and in “favour of a person dealing with a company in good faith.” The respondents contend that the Article makes it impossible for the Company to depart from the resolutions passed at an EGM. If the Court were to reach a conclusion on that issue for the purpose of refusing the appellants the right to participate in the hearing of the applicant, it would be deciding a central issue in that action on a motion and would be pre-empting the High Court’s consideration of the matter. The second proposition is that, in no circumstances whatever, can it be envisaged that any question of the repayment of the capital would arise is equally a matter for decision by the High Court.

 

56. I have carefully refrained from expressing any view about the strength of the arguments. In my view it is clear that, prima facie, the appellants are at least potentially affected by the s. 11 application. I cannot preclude them from enjoying the right to participate by deciding in advance issues which are essentially matters to be decided in the proceedings themselves. That would be to beg the question. There are two further considerations. Firstly, I cannot see that, in any event, the respondents suffer any disadvantage or prejudice from the presence and full participation of the appellants. It is not suggested that the hearing of the application will be delayed by their participation. They are already notice parties under the limited order of Charleton J. They do not wish to postpone the hearing. Secondly, the appellants are not necessarily in precisely the same position as the Minister. The Minister made the payments required for the capitalisation. The appellants, more precisely the Company, are the recipients. If there is a debate about whether an order setting aside the Direction Order implies repayment, the Minister and the Company clearly have potentially different interests.

 

57. The third ground or set of grounds touch more on the discretion of the Court. The first point, referred to in fact by the learned High Court judge, is that it would be, in some sense, illogical to permit the appellants to participate in support of the Direction Order in circumstances where the Company and voted at the EGM against it. That, however, is precisely to beg one of the questions which arise for decision in the action. It is arguable — and I refrain from expressing any view about it — that there is no lack of logic but that there was a divergences of view between the Board of the Company and the shareholders.

 

58. The argument about delay involves two points. The first is that it is unfair that the respondents were obliged to comply with an extremely short time limit (at that time, five working days) whereas there was no time limit for the application by the appellants to be joined as notice parties. That, however, is the result of the terms of the Act. It is true that any applicant must comply with the time limit and that the time limit is extremely short. A person or body wishing to support the Direction Order could not possibly apply to be joined within that time, because it would be necessary to wait until an application had been made under the section. Once the matter is, as it necessarily is, outside the time limit it remains for the court to judge whether there has been any undue delay. The learned trial judge criticised the appellants for delay. Nonetheless, he permitted them to participate, though to a limited extent. Even if that point is not entirely decisive, I would say that there was no such delay has should preclude the appellants from exercising what I consider to be their right to participate in the proceedings. In O’Keeffe v An Bórd Pleanala, a party was permitted to be joined as a notice party at the appeal stage, having made a considered decision not to apply in the High Court. That is not, of course, decisive. The matter be must be judged on its merits in each case. There has been some delay, undoubtedly on the part of the appellants. There was a short time, at the beginning of the proceedings, when there were questions about the participation of some of the respondents. They were resolved at an early stage. More crucially, however, the motion brought by the appellants to be joined as notice parties was dated 10th October 2012. The points of claim were not delivered by the respondents until 2nd November 2012. The respondents grounding affidavit was sworn on 31st August 2013. Looking at the matter in broad terms, while there has been some delay, it has not been significant and has not contributed to delay in the proceedings.

 

59. The question, however, arises whether this Court should, at this stage of the proceedings refer questions of interpretation to the Court of Justice for preliminary ruling pursuant to Article 267 of the Treaty on the Functioning of the European Union. Mr. Skoczylas, speaking for the respondents, submits that the Court should now refer three specific questions. They are:
60. “Does Article 10 of Directive 2009/101/EC preclude [the Company] from opposing the Applicants in the main action in the High Court, given that [the Company] decided at the EGM on 20 July 2011 to oppose the terms of the July 2011 Direction Order?”

 

1. “Is a company ([the Company] in the instant case), which has been taken over by the State based on measures, which are alleged in the ongoing court proceedings to have breached EU law, precluded from assisting the State in defending the very court proceedings in question, after the company’s shareholders had decided in general meeting to oppose the State’s takeover?”

 

1. “If the Supreme Court allows [the Company] to assist the State in defending the main action, and if it subsequently turns out that the measures taken by the State to take over [the Company] were indeed incompatible with EU law, would then be in effect allowed to take advantage of its own failure to comply with EU law? Must, therefore, the Supreme Court preclude [the Company] from assisting the State in the defence in the main action?”

 

60. It is immediately obvious that, in the context of the present case, the object and purpose of each of these questions is to prevent the appellants from being admitted as full notice parties to the claim they make under s. 11 of the Act in the pending proceedings in the High Court. Essentially, the respondents make the point that Article 10 of Directive 2009/101/EC can have the effect that a national Court is precluded from allowing a natural or legal person to become a party to legal proceedings, even in circumstances where that national court considers the proposed party to have a direct interest. The Court has not been referred to any authority for that surprising proposition.

 

61. The respondents cite the decision of the European Court in Case 222/85 Johnston v. Chief Constable of the Royal Ulster Constabulary [1986] ECR 1651. That case was is best known for the Court’s ruling, at paragraph 19 of the judgment, that “all persons have the right to obtain an effective remedy in a competent court against measures which they consider to be contrary to the principle of equal between men and women” laid down in Directive No. 76/207. The obligation thus imposed on Member States to provide an effective judicial remedy, as the Court stated at paragraph 18, “reflects a general principle of law which underlies the constitutional traditions to the Member States” as well as Articles 6 and 13 of the European Convention for the Protection of Human Rights and Fundamental Freedoms.

 

62. The respondents are unquestionably entitled to call that proposition in aid in pursuit of their application in the High Court. It by no means follows from the proposition that one individual has the right to a judicial remedy to pursue a claim based on EU law against the State that another individual or corporate body directly affected by the claim should not be permitted to argue against it. The contrary appears much more consistent with the principle laid down in Johnston.

 

63. The principle advanced by the respondents also runs counter to the principle of national procedural autonomy which would appear to include the power of each national court to decide what parties may participate in legal proceedings. That fundamental principle, as stated, for example, by the Court of Justice in C-255/00 Grundig Italiana Spa v Ministero delle Finanze [2002] ECR I-8003, is that:

“it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from Community law, provided, first, that such rules are not less favourable than those governing similar domestic actions (principle of equivalence) and, secondly, that they do not render virtually impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness)”

 

64. The mechanism for obtaining preliminary rulings pursuant to Article 267 TFEU is based “on a dialogue between one court and another, the initiation of which depends entirely on the national court’s assessment as to whether a reference is appropriate and necessary.” (Case C-2/06 Kempter [2008] ECR I-411). It is true that the Supreme Court, being a court against whose decisions there is no further judicial remedy under national law, may become bound to refer a question of interpretation which it finds necessary to enable it to give judgment in the case before it. However, it is matter for this Court to assess the stage of the proceedings at which any such question should be referred. There may be cases in which a single point of law can be readily identified at an interlocutory stage. More frequently, however, it is appropriate to await any necessary findings of fact and full argument about relevant points of national law, which must be determined before the European Court can conveniently be asked to decide a disputed point of EU law.

 

65. The Court of Justice in its “Recommendations to National Courts and Tribunals in Relation to the Initiation of Preliminary Ruling Proceedings” (OJ 6.11.2012, 2012/C 338/01) addresses the question of the “appropriate stage at which to make a reference for a preliminary ruling” as follows:

“18. A national court or tribunal may submit a request for a preliminary ruling to the Court as soon as it finds that a ruling on the interpretation or validity of European Union law is necessary to enable it to give judgment. It is that court or tribunal which is in fact in the best position to decide at what stage of the proceedings such a request should be made.

 

19. It is, however, desirable that a decision to make a reference for a preliminary ruling should be taken when the national proceedings have reached a stage at which the referring court or tribunal is able to define the legal and factual context of the case, so that the Court of Justice has available to it all the information necessary to check, where appropriate, that European Union law applies to the main proceedings. In the interests of the proper administration of justice, it may also be desirable for the reference to be made only after both sides have been heard.”

 

66. In my view, it would be entirely inappropriate to make any reference at this stage of the proceedings. It is inconceivable that the Court of Justice would hold that there is a duty on a national court positively to exclude a party with a direct interest in proceedings from being heard. The questions posed are at the heart of the respondents’ case in the main proceedings. To refer them now would beg a question which has yet to be fully argued. It is overwhelmingly preferable to allow the application pending in the High Court to proceed to hearing with all parties appearing and participating. A date has been fixed for that hearing. There will be no delay arising from the joining of the appellants. If, on the other hand, the Court were to postpone the joinder of the appellants at this point and make a reference at this there would be inevitable delay pending the decision on the reference. While the ruling is pending, the question arises as to how the existing High Court proceedings are to be affected. If they continue to hearing as contemplated, the appellants will necessarily be excluded from playing the full part which, in my view they are entitled to play. The alternative is that they would be adjourned to await the outcome of the reference with consequent delay to the detriment of all parties. These are powerful considerations which weigh against the making of a reference at this stage of the proceedings.

 

67. For all of these reasons, I would allow the appeal and I would make an order permitting the appellants to be joined as notice parties to the application in the High Court, without the limitations imposed by the High Court.

 

 

Persona Digital Telephony Limited & anor -v- Minister for Public Enterprise & ors

 

 

Neutral Citation: [2014] IEHC 78

 

THE HIGH COURT

JUDICIAL REVIEW

 

[2001 No. 9223 P.]

 

 

 

 

BETWEEN

 

PERSONA DIGITAL TELEPHONY LIMITED AND SIGMA WIRELESS NETWORKS LIMITED

PLAINTIFFS

AND

THE MINISTER FOR PUBLIC ENTERPRISE, IRELAND AND THE ATTORNEY GENERAL

 

DEFENDANTS

AND

MICHAEL LOWRY AND DENIS O’BRIEN

 

THIRD PARTIES

 

JUDGMENT of Mr. Justice Ryan delivered the 21st February, 2014

Introduction

1. This case is one of two that are proceeding towards being heard in this Court in which the plaintiffs seek damages and other reliefs arising out of the awarding of the State’s second GSM phone licence to ESAT Digifone in 1996. The plaintiffs in the other case were some of the members of a consortium that entered the competition for the licence. The first plaintiff in this case, Persona, was also an applicant. The actions have many features in common, as well as some differences. They were together the subject of a judgment of this court in an application by the State defendants to strike them out on the ground of inordinate and inexcusable delay. The appeal to the Supreme Court was dealt with in composite form also and judgments were delivered under the titles of the two cases on the 17th October, 2012.

 

2. A feature of the applications before this Court and the Supreme Court was that the plaintiffs maintained that they were justified in holding back their proceedings while the Moriarty Tribunal investigated. That body had been set up to investigate urgent matters of public importance, to wit, payments allegedly made to politicians who included the Minister at the Department in charge of the GSM licence competition, Mr. Lowry. One of the topics explored at length in the Tribunal was the award of the GSM licence to ESAT. The Tribunal is referred to in the replying affidavit in this motion sworn by Mr. Boyle in opposition. The report is quoted in the Supreme Court judgments in the litigation above mentioned and I will refer to some of those citations later.

 

3. One of the differences between the cases is that the plaintiffs in the instant action have chosen to sue State defendants only, namely, the Minister for Public Enterprise, Ireland and the Attorney General. Unlike the other case, these plaintiffs have not sued ESAT Digifone and Mr. Denis O’Brien and neither have they named Mr. Lowry personally as a defendant. The plaintiffs say that they made a deliberate choice in that regard.

 

4. The State defendants successfully applied to join Mr. Lowry and Mr. O’Brien as third parties. Mr. O’Brien’s solicitor, Mr. Meagher, later wrote to the plaintiffs’ solicitors and the Chief State Solicitor asking for their consent to his client’s being joined as a defendant, so altering his status in the litigation. The State consented, but the plaintiffs refused.

 

5. Then Mr. Meagher wrote a detailed letter on the 3rd May, 2013, in which he recited the fact that his client had been made a third party and set out the reasons why Mr. O’Brien should be made a defendant instead. The State gave formal consent by letter of the 14th June, 2013, but, somewhat surprisingly for this kind of litigation, the plaintiffs’ solicitors simply did not reply, not even to acknowledge the correspondence.

The Rule

6. This motion was issued by notice dated the 2nd July, 2013. The application is brought under O. 15, r. 13, of the Rules of the Superior Courts (“RSC”) which provide as follows:-

 

“No cause or matter shall be defeated by reason of the misjoinder or non-joinder of parties, and the Court may in every cause or matter deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the names of any parties improperly joined, whether as plaintiffs or as defendants, be struck out and that the names of any parties, whether plaintiffs or defendants, who ought to have been joined, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added. No person shall be added as a plaintiff suing without a next friend, or as the next friend of a plaintiff under any disability, without his own consent in writing thereto. Every party whose name is so added as defendant shall be served with a summons or notice in manner hereinafter mentioned, or in such other manner as the Court may direct, and the proceeding as against such party shall be deemed to have begun only on the making of the order adding such party.”

7. Order 15, rule 13 gives the courts power to join a party as plaintiff or defendant in two situations. First, there is a party “who ought to have been joined” and, secondly, where the party’s presence before the court is necessary to enable the court to decide all the questions in the case effectually and completely. The first of these powers is invoked by Mr. O’Brien in regard to the conspiracy claim. Mr. O’Callaghan S.C., on behalf of Mr. O’Brien, the applicant, makes the point that it is acceptable practice to plead that a defendant conspired with persons unknown, when the identity of the other wrongdoers is not known to the plaintiff, but he submits that it is not acceptable to do that when the plaintiff knows the identity of the person he is accusing. On this test the question is:

“Is Denis O’Brien a party who ought to have been joined as a defendant?

When the other limb of the rule is reduced to its essential elements so far as relevant to the motion, the question can be stated thus:-

“Is Denis O’Brien’s presence before the court necessary to enable the court effectually and completely to adjudicate on all the questions in the case?”

 

The Law

8. There is little disagreement between the parties as to the legal test to be applied under the rule. However, Mr. McEnroy S.C. for the plaintiffs argues for an interpretation of the provision in light of constitutional rights as to litigation. The rule gives the court the power to join a party as a defendant or as a plaintiff at any stage of the proceedings and “either upon or without the application of either party, and on such terms as may appear to the court to be just”, so the consent of a plaintiff to joining a defendant is not a necessary precondition. However, an application to join a defendant against the wishes of a plaintiff will only be granted in exceptional circumstances. There is a clear exposition of this principle in Fincoriz SAS v. Ansbacher Limited [1987] IEHC 19, where Lynch J. said that:-

“Prima facie a plaintiff is entitled to sue whomsoever he wishes and is entitled not to have to sue a person that he does not wish to sue.”

He also said:-

“In order that a person may be joined as a defendant without the consent and, a fortiori, against the wishes of the plaintiff there must be some exceptional circumstances.”

The exceptional circumstances are that it is necessary to enable the court effectually and completely to adjudicate all the questions in the case, such necessity being established as a matter of probability, as Lynch J. held.

9. In Amon v. Raphael Tuck & Sons Ltd [1956] 1 Q.B. 357 Devlin J. (as he then was), said at p. 371 in a passage that has been endorsed in this jurisdiction and in England that the test is:-

 

‘”May the order for which the plaintiff is asking directly affect the intervener in the enjoyment of his legal right?’ It is not, on this view, enough that the plaintiffs rights and the rights which the intervener wishes to assert should be connected with the same subject-matter. Nor is it enough that the intervener’s commercial interests may be affected by an order made in the action.”

Devlin J also said at pp. 386- 387:-

“The construction of the rule is, and must be, the same in all circumstances; but the test that is appropriate to determine whether a party is necessary or not may vary according to the circumstances.”

10. In Barlow & Others v. Fanning and UCC [2002] 2 I.R. 593, the plaintiffs originally sued the first defendant but subsequently served notice of discontinuance against him. The first defendant applied to be re-joined. The Supreme Court ruled that there were no exceptional circumstances and allowed the appeal against the High Court order rejoining that defendant. The case is unusual and different from the present in that there was opposition to the first defendant’s application, not merely from the defendant but from the plaintiff. Keane C.J. endorsed remarks of Viscount Dilhome in Vandervell Trustees Limited -v- White and Ors [1971] AC 912, when he said of the corresponding words in the English rule which were the same as ours:-

“I cannot construe the language of the rule as meaning that a party can be added whenever it is just or convenient to do so. That could have been simply stated if the rule was intended to mean that. However wide an interpretation is given, it must be an interpretation of the language used. The rule does not give power to add a party whenever it is just or convenient to do so. It gives power to do so only if he ought to be joined as a party or if his presence is necessary for the effectual and complete determination and adjudication upon all matters in dispute in the cause or matter.”

The rule in England was subsequently widened very considerably. Keane C.J. also said:-

“It is no doubt the case that, if the plaintiffs succeed in the present action, the good name and reputation of Professor Fanning may be adversely affected, since, for the most part, the establishment of the plaintiff’s case against the University necessitates the proof by them of damaging allegations against Professor Fanning. However, that can often be the case in litigation where a party elects to sue one defendant in reliance on his vicarious liability for the wrongdoing of another who is not sued. Thus, the owner of a vehicle is frequently sued as being vicariously responsible for the negligence of a person driving the vehicle with his consent. If the submissions advanced on behalf of Professor Fanning were well founded, it would be necessary in every such case for the High Court, on the application of the driver, to join him as a defendant in the proceedings because his good name and reputation might be adversely affected by what was said during the course of the case or, indeed by the findings of the trial judge.”

11. In Duignan v Dudgeon [2005] IEHC 348, Kelly J, said at pages 8- 10:-

“The essence of the plaintiffs claim is that the trustees were wrong to refuse to transfer his pension entitlements from the fund to another pension scheme. The trustees made that determination on foot of information received by them to the effect that the plaintiff had retired from his position in Arnotts. If he retired he was not entitled to have his pension funds transferred. The plaintiff asserts that no such retirement took place. Whether his departure from Arnotts was by means of retirement or not is a matter between him and Arnotts. It cannot be a matter between the plaintiff and the trustees for they were not his employers.

. . . .In my opinion it is entirely artificial to suggest, as the plaintiff does, that his departure from Arnotts is not the main issue in the proceedings. It is, in many respects, at the forefront of the proceedings and the Plaintiff himself has made it so by his positive assertion that he did not retire from his position. The crucial question of whether that is correct or not can only be decided with Arnotts being joined as a defendant.

 

In my view it makes no sense for the action to proceed without this issue being properly addressed. The action as constituted at present cannot effectually and completely adjudicate upon and settle that crucial question.”

 

 

The Plaintiffs’ Claim

12. The statement of claim seeks damages including exemplary damages under many headings including misfeasance in public office, breach of duty, breach of contract, breach of legitimate expectation, breach of constitutional rights, deceit, conspiracy, misrepresentation including fraudulent misrepresentation and dishonest assistance, as well as some other reliefs. In particulars of the various wrongs, it is alleged inter-alia that the Minister, identified as Mr. Lowry, manipulated the GSM competition to ensure that the licence went to Esat Digifone and did so for a secret profit and commission and thereby corrupted the competition for the license. The plaintiffs plead that the Minister conspired with Esat Digifone to promote an inevitable competition result and in furtherance of the conspiracy “the parties thereto infiltrated or penetrated the competition and/or in the alternative ignored or disregard of the competition process and/or in the alternative utilised the process for the purpose of concealment and thereby ensuring the granting of a second GSM licence to Esat Digifone.” The plaintiffs plead that the implied terms of the contractual arrangements in relation to the competition included one that the Minister would not accept a bribe from one of the applicants. It is clear, therefore, that the plaintiffs’ essential, if not exclusive case, is that the successful applicant won the competition by bribing the Minister. Although it is obvious that the only way that a company can conspire or do anything else is by human agency, the statement of claim does not name any alleged actor as having done wrongful acts to secure the license for Esat.

The Affidavits and the Arguments

13. In two affidavits, Mr. O’Brien’s solicitor, Mr. Meagher, sets out the case on which the application is based and which he previously put into writing in the long letter that he sent to the solicitors for the plaintiffs. He asserts that there are exceptional circumstances in this case that make it necessary for Mr. O’Brien to be joined as a defendant in the action. It is not sufficient that he should be a third party, answerable only to the defendant in respect of that party’s liability. Mr. Meagher quotes the statement of claim to show the extensive nature of the allegations of wrongdoing and the importance that Mr. O’Brien should be in a position to answer them.

 

14. The affidavits argue the case pro and con. The Persona affidavit by Mr. Boyle includes claims that the applicant has not made out his case to be joined as a defendant, that Mr. O’Brien is guilty of delay, that the plaintiffs are entitled to sue whomsoever they choose and that they should not be put into a position where they are obliged to make a case against a party whom they have not sued. These are central points submitted by Mr. McEnroy in his argument opposing the motion on behalf of the plaintiffs.

 

15. Mr. O’Callaghan points out that the State defendants obtained an order from the court joining Mr. O’Brien and Mr. Lowry as third parties on the basis, as stated in the affidavit grounding that application, that “if the alleged or any wrongful corrupt acts occurred (which is denied) the proposed third parties were at all times the persons responsible for the alleged wrongful and/or corrupt acts which allegedly ensured the competition process was corrupted so as to ensure an inevitable Esat Digifone win and/or to enable the realisation of a corrupt financial benefit to Esat Digifone and/or Mr. O’Brien and/or Mr. Lowry.”

 

16. Counsel cites authorities in this and other common law jurisdictions. He says that the fact that Mr. O’Brien has already been joined as a third party is implicit recognition that his presence is necessary for the court to adjudicate all matters arising in the action but in that capacity his client is severely restricted in his defence because he can only answer the claim as made by the State defendants against him and he is powerless and without remedy in respect of the claim made by the plaintiffs against the State defendants.

 

17. Order 15, rule 13 RSC envisages the precise situation that arises here, namely, where a plaintiff does not consent to having a defendant joined. Their test is whether the involvement of the intended party is necessary to enable the court to resolve the issues. An order in favour of the plaintiffs and made in the main action, assuming he was not made a party, would adversely affect Mr. O’Brien’s rights. It is clear in the circumstances that this is an exceptional case calling for the application of the power contained in the rule.

 

18. Mr. O’Callaghan submits that the statement of claim contains allegations that are specific and directed implicitly at Mr. O’Brien as the actor on behalf of Esat although he is not actually named. Therefore as the party implicitly alleged to be the payer, Mr. O’Brien should be a defendant because his interests: legal, proprietary and reputational, are directly affected. The allegations are extremely grave. He argues that the plaintiffs have not been able to assert any real prejudice but, by contrast, Mr. O’Brien is severely prejudiced if he is confined to his role as a third-party. Specifically, Mr. O’Brien cannot defend the conspiracy claim or the allegations of corrupt payments; he cannot raise a notice for particulars of any part of the claim; he cannot make a counterclaim; he is limited in his capacity to obtain discovery of documents from the plaintiffs; and finally, there is no assurance that the third-party issue involving him will be heard at the same time as the action between the plaintiffs and defendants.

 

19. Mr. McEnroy says that his clients have a constitutional right that is in the nature of a property right to litigate their civil claims and the proposed application, if permitted, will interfere with that right. The circumstances in which that is permissible must be truly exceptional. He cautions against adopting too readily the jurisprudence of other common law countries that do not have constitutional protection of access to the courts. The plaintiffs have a constitutional and legal right to decide whom to sue.

 

20. Counsel argues that Mr. O’Brien is not Esat Digifone and does not have any locus standi in his personal capacity. Although he may have been chairman or director or shareholder or all three, that does not affect the separate corporate personality of the company.

 

21. The claim for damages in the statement of claim is set out under thirteen heads of liability and when the court hearing the case decides liability in respect of the defendants, it will not go further and explore other elements behind that liability. It is inappropriate as Counsel argues to focus on the count of conspiracy to the exclusion of the other heads of claim.

 

22. The plaintiffs submit that the applicant Mr. O’Brien has not established any exceptional circumstances on the evidence put forward in this motion. There is no evidence of the corporate structure and management of Esat Digifone.

 

23. The plaintiffs are not seeking any order against Mr. O’Brien and he has not said that he has any claim against the plaintiffs. The State did not deal with individuals in the GSM licence competition.

 

24. It would be inconvenient and costly for the order sought to be made. The effect would be to increase the costs massively and to introduce collateral legal issues that are more appropriate to a tribunal than to a court.

 

25. Mr. McEnroy submits that even if the Court came to the conclusion that there were indeed exceptional circumstances in this case, it should exercise its discretion not to join Mr. O’Brien as a defendant.

The Moriarty Tribunal

26. The Supreme Court judgments in Comcast International Holdings Inc. & Ors v. Minister for Public Enterprise & Ors; Persona Digital Telephony Ltd & anor. v. Minister for Public Enterprise & Ors. [2012] IESC] 50, and the associated Comcast action that allowed the appeals by the plaintiffs and permitted the cases to proceed are of relevance in revealing the issues in the cases as they appeared to the judges and the relevance of the tribunal and its proceedings in the history of this and the Comcast litigation. Denham C.J. records the evidence before the High Court and the Supreme Court at para. 38:-

 

“that the primary reason for the delay in the proceedings was a decision taken by Comcast and personal matter will wait the completion of the investigation section of the tribunal into the granting of the licence.”

Persona followed the evidence that unfolded at the tribunal.

27. Hardiman J. noted that although there were differences in the parties between the two actions at p. 1:-

 

“the essential issues are the same in each of the cases.”

The judge set out the background to the Comcast case, at page 5 of the judgment, as being the allegations inter-alia that the minister had been corrupted by Mr. O’Brien “by the promise or expectation of payments to him of money or moneys worth” and had ensured the award of the license “to Mr O’Brien’s consortium.” At page 8, Hardiman J. cited paragraph 60.01 of the Tribunal Report which referred to evidence of clandestine payments by Mr. O’Brien to Mr. Lowry.

28. Clarke J. referred to the allegations made in the proceedings and which formed the subject of the findings of the Moriarty Tribunal, including allegations that the Minister, Mr. Lowry, was paid money by Mr. O’Brien to influence the competition for the licence.

 

29. A consideration in this application is the source of information about the role of Denis O’Brien and his connection with the issues in the case. Persona’s counsel protests about any general information about Denis O’Brien’s role and the Tribunal being used in this application. He insists that only information contained in the affidavits can be considered by the Court. However, in this connection, it is noteworthy that Mr. Boyle’s affidavit in opposition to the motion refers to the Moriarty Tribunal and the Supreme Court judgments contain multiple references. It is not that anything contentious arises, merely the subject of investigation and/or the fact of what was determined are the relevant matters. The Court is entitled if not required to notice the fact that a major public inquiry was established under statutory authority to investigate urgent matters of public importance.

Issues in the Case

30. An analysis of the Statement of Claim reveals that central questions in the case are or must include the following:-

 

(a) Did the Minister conspire with Esat to corrupt the competition?

(b) Did Esat bribe Minister Lowry?

 

(c) If the plaintiffs succeed, is Denis O’Brien liable to the defendants for an indemnity or contribution?

 

(d) Are those questions really asking whether the Minister conspired with Denis O’Brien or whether Denis O’Brien bribed the Minister?

 

(e) Irrespective of how question (c) is answered, can the central questions as identified above be adjudicated on effectually and completely without having Denis O’Brien as an active participant as a defendant in the plaintiffs’ claim?

 

 

Discussion

31. The question of delay can be disposed of briefly. The application should not fail on that ground. If the interest of justice requires that the applicant’s status in the action be changed from third party to defendant, it would be wholly inconsistent to defeat the application for delay in the special, even unique, circumstances of this litigation. The motion was brought after the defendants’ third party procedure. The history of the proceedings, the decision of the Supreme Court in the State’s dismissal motion and the observations of the judges all support this position. Furthermore, all the jurisprudence on delay posits a test of the interest of justice in cases of inordinate and inexcusable delay.
32. The fundamental question is what is the just procedural decision in the circumstances of the case? Is it the case that Denis O’Brien ought to have been joined? Or is his “presence before the Court necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter?”

 

33. It is obvious that Denis O’Brien is a necessary party in some capacity to the actions that have arisen out of the granting of the GSM licence. He is named as a defendant in the Comcast actions and in this Persona case, he has been brought in as a third party. There is no question about his centrality to the fundamental issues. It is impossible to think that the actions could proceed to a conclusion in which all the questions involved would be effectually and completely decided without his being a leading participant. It is equally difficult to conceive how his interests, whether legal, proprietary or as to good name will not be materially affected by the outcome of the litigation.

 

34. Mr. O’Brien’s position is wholly different from those of the applicants who unsuccessfully applied to be joined in the cases cited above. The Supreme Court in its decision on the issue of delay highlighted the immense importance of the issues raised in the cases and actually declared that the litigation of which this case forms a part is quite unique. The position of Mr. O’Brien in respect of this unique litigation is also practically unique.

 

35. There is considerable force in the argument that Mr. O’Brien ought to have been joined as a defendant in this case because he is alleged by the plaintiffs to have conspired with the Minister to achieve a corrupt outcome of the licence competition. It is true that he is not named, but he is implicitly identified. Although it is permissible to plead a conspiracy between some named persons and persons unknown, I do not know of any practice that permits a conspiracy to be alleged against persons known to the pleader without actually naming them.

 

36. If Mr. O’Brien is not joined as a defendant and is left to stand by as the plaintiffs’ claim is presented against the State defendants only, he and the Court will be observing a drama unfold in which he is the central participant but without any entitlement to intervene. The case alleging misconduct of the most serious nature will proceed without any involvement of the person alleged to be the major wrongdoer.

 

37. Another possibility may be mentioned to illustrate the injustice as well as the irrationality of such a position. Suppose the plaintiffs succeed in their action against the State defendants and the latter proceed to claim indemnity/contribution and Mr. O’Brien succeeds in his defence of the State’s claim. That result may be considered improbable but I am not concerned at this point with the result of the action but rather with a consideration of the consequence of leaving Mr. O’Brien merely as a third party.

 

38. It is clear that there must be very exceptional circumstances before the choice made by a plaintiff as to whom to sue will be interfered with by the addition of another defendant. Having said that, the rule envisages that the court will make a decision that is not dependent on the consent of the plaintiff. It follows that the absence of such consent is not determinative of the application. It is also relevant that the plaintiff is not deprived of his right to sue any defendant. The decision is concerned with what is necessary to do justice, that is, to decide all the questions involved in the case effectually and completely.

 

39. The constitutional right to litigate is not threatened by the jurisdiction under O. 15, r. 13 RSC. The plaintiffs made a tactical decision in this case and they are entitled to have that respected as far as practicable and as far as consistent with the interests of justice but no further. The plaintiffs’ rights fall to be balanced against the interests of others and the requirements of justice in the determination of the issues that arise in the case. The right to decide whom to sue is not an absolute right and the entitlement of a party to retain tactical advantage is similarly, or even more subject to being set aside or adjusted to take account of other vital considerations.

 

40. In the result, it seems to me that the two tests embodied in r. 13 are met in this case. The second test is more amply established than the first. In other words, I think that the decision that Mr. O’Brien ought to have been joined is less securely established than that his presence before the court is necessary for the purposes stated in the rule.

 

41. My decision accordingly on the motion is that the applicant is entitled to be joined as a co-defendant to this action.

 

42. The rule provides that a party whose name is added as a defendant shall be served with the summons or notice and the proceedings are deemed to have begun only on the making of the order adding the party. Mr. McEnroy raised the possibility that Mr. O’Brien might rely on this provision to plead the Statute of Limitations in respect of the plaintiffs’ claim, but that would appear to be a bizarre possibility and improbable in the highest degree in the circumstances of this application and, moreover, could be the subject of a condition in the order. Mr. O’Callaghan dismissed the possibility of such a plea.

 

43. If the plaintiffs do not wish to sue Mr. O’Brien to seek any relief that is a decision open to them. They cannot be forced to make a case that they do not want to make they cannot be obliged to change their pleadings so as to include a claim against the new added party. The point of joining a new defendant is in the interest of justice, in the court’s interest in seeing that litigation is properly and effectively conducted and that its processes are operated in a way that is just and fair and also in the interest of the added party because of the impact of the litigation on his rights.

 

44. Mr. O’Brien as an added defendant might, depending on the attitude of the plaintiffs, be in a somewhat anomalous position. He might be a party in the case with the right to cross-examine all the plaintiffs’ witnesses, but without being in danger of having any award made against him in favour of the plaintiff. That would be a consequence if the plaintiffs so decided but he would of course remain as a party liable to the defendants for any claim successfully made against the State on foot of the plaintiffs’ claim and he would also be liable for costs.

 

45. It is unnecessary at this point for the Court to specify the precise procedural steps that follow from the decision that Mr. O’Brien should be joined as a co­ defendant. If the plaintiffs elect to make a case against him, he will have amended pleadings specifically addressed to him to which he will respond by way of defence. If the plaintiffs maintain their posture of not claiming against Mr. O’Brien, it will be a matter for him to define the areas of the claim that he challenges and then to file a defence expressing that. He will also be defending the State’s claim for contribution or indemnity.

 

46. Finally, I should say something about a submission Mr. McEnroy made as to what should follow if the Court rejected his argument and ordered that Mr. O’Brien be joined as a defendant. He suggested that any such relief should come at a heavy price for the applicant. The order should be on terms of the most swingeing conditions as to costs being imposed on the added party in favour of the plaintiffs. I do not agree. If my conclusion is correct, the plaintiffs’ tactical manoeuvre was wrong and was conducive to injustice. First, Mr. O’Brien ought to have been joined and second, his presence as a defendant is necessary. The plaintiffs do not have a sound basis for demanding tribute from the newly added party. Joining Mr. O’Brien is not an act of indulgence of his wishes, but rather a decision under the Rules of the Superior Courts as to what is required in the interest of justice.

 

 

 

Used Car Importers of Ireland Ltd -v- Minister for Finance & ors

[2014] IEHC 256

 

Gilligan J

Conclusion

26. It is not in dispute between the parties that there is jurisdiction exercisable by this Court to join a non-party for the purpose of making an order for costs against them, and that this jurisdiction is derived from O. 15. r. 13 of the Rules of the Superior Courts and s. 53 of the Supreme Court Judicature (Ireland) Act 1877.

 

27. In arriving at my decision I propose to follow the rationale as expressed by Clarke J. in Moorview Developments Limited v. First Active Plc [2011] 3 IR 615, and his decision in Thema International Fund Plc v. HSBC Institutional Trust Services (Ireland) Ltd [2011] 3 IR 654 and the decision of Tomkins J. in the New Zealand decision of Carborundum Abrasives Ltd v. Bank of New Zealand (No.2) [1992] 3 NZLR 757 which was cited with approval and adopted by Clarke J. in his decision in Moorview.

 

28. The first factor to be taken into account by this Court is as to whether or not it might have been reasonable to consider that the plaintiff, who is primarily liable for the costs for which the non-party may be held to be liable, could meet any costs if it failed in the proceedings, which it did in this instance. It appears to this Court to be reasonably clear and not disputed that the plaintiff company was and is not in a position to meet the order which has been made against it to pay the costs of the successful defendants herein to be taxed in default of agreement.

 

29. As regards the degree of possible benefit of the proceedings to Mr. O’Dowling and his particular involvement, this Court is satisfied that Mr. O’Dowling had at least an indirect connection with the litigation and that he is not a party with no prior link. He was a director and a 50% shareholder in the company at the material time of the alleged cause of action and at the point in time when the proceeding were instituted. He ceased to be a director and shareholder at some time later in 1995. He certainly made a contribution to the costs of the plaintiff’s proceedings and made a number of admissions in this regard while giving evidence before the trial judge. There does not appear to be any direct evidence as to the extent of his contribution in monetary terms, and it is clear from the transcript of the hearing in the original action that Mr. O’Dowling stated under oath that most of the work in the case on the plaintiff’s behalf was done by the lawyers on a no foal, no fee basis. It does appear reasonable to conclude that Mr. O’Dowling funded the ongoing costs to a certain level but not a substantial level particularly if counsel were prepared to act on a no foal, no fee basis. It is also the position that this Court does not have the benefit of knowing the amount of funds as contributed by Mr. O’Dowling to the plaintiffs for the purpose of litigation, and that Clarke J. in his conclusion in Thema International Fund v. HSBC Institutional Trust Services (Ireland) [2011] 3 IR 654 concluded that it was necessary for a senior official within the plaintiff to give undertakings which, inter alia, provided that proper records be maintained and kept identifying the amount and source of any third party funding.

 

30. Clarke J. in Thema asserts that there is nothing objectional about a person with a legitimate interest in the outcome of proceedings providing funding for the proceedings. Clarke J. drew a distinction between persons with a legitimate interest such as creditors of shareholders and a professional third party funder who makes a commercial decision to invest in litigation with a view to making a profitable return. He stated at p. 662 of his decision that:-

 

“After all if the litigation is well founded then the shareholder or creditor is only getting their due. If an insolvent company has a good cause of action, then the shareholders or creditors who might benefit by any recovery on foot of that cause of action are getting no more than their entitlements. If the proceedings are bona fide progressed, then such parties are simply funding an entity in which they have a legitimate interest in the hope that the entity will be able to pay them monies due (in the case of creditors) or dividends or capital distributions (in the case of shareholders).”

31. At p. 663 of his decision Clarke J. defined a professional third party funder as a third party who has no direct or indirect connection with the litigation and becomes involved in buying in to the case on the basis of an agreement to fund the action in return for sharing the proceeds. He went on to state that in his view there was a substantial difference between a party who already has an indirect link to the impecunious party and who has, therefore, already got an indirect interest in the relevant litigation on the one hand, and a party with no such prior link who simply buys into the litigation on the other hand.
32. In my view on the evidence available, Mr. O’Dowling can certainly be regarded as a non-party who partially funded the litigation but was not a professional funder who had no direct or indirect connection with the litigation. Unlike the situation in Mooview, however, it does not appear that Mr. O’Dowling was the funder of all the litigation nor is the situation clear that Mr. O’Dowling would have been the beneficiaries of a successful outcome by an overwhelming margin, or have been the main beneficiary. The situation appears to have been that Mr. O’Dowling would have shared the proceeds with his previous co-director and co-shareholder, Mr. Fintan Riordan. Clearly, it is the case that Mr. O’Dowling would benefit from the proceedings if they were successful.

 

33. There was extensive evidence which if accepted by the trial judge may have led to a different conclusion. It is a recognised hazard of commercial litigation that the evidence, both factual and professional, as offered on behalf of a party to the litigation may or may not be accepted by the trial judge as opposed to the factual and professional evidence as offered on behalf of the other party. The fact that the proceedings were not successful does not render them unreasonable. In the particular circumstances of this case the judgment of the trial judge has been appealed to the Supreme Court.

 

34. This situation if very far removed than that which prevailed in “Moorview” which resulted in a non-suit at the close of the plaintiff’s case. It does not appear that in the particular circumstances of this case the costs were significantly increased by reason of serious procedural failures on the part of the plaintiff, or in some way connected with or to Mr. O’Dowling. It does appear that the proceedings raised significant issues of fact and law and that the proceedings were instituted with the benefit of advices of senior counsel and that the plaintiff’s case was supported by a number of credible expert witnesses. It also appears that there were significant issues with regard to discovery which resulted in an order of this Court (Laffoy J.) of 1st March, 2006. In describing the proceedings Laffoy J. refers to the fact of an order which was made by Costello P. on 17th July, 1995, wherein by consent of the parties a timeframe was fixed for delivery of pleadings and it was further ordered that each side should made discovery within six weeks from the delivery of the defence of the documents which are or have been in their respective possession or power relating to the matter in question in the action. As Laffoy J. states unfortunately the enthusiasm for a speedy resolution of the matter which obviously inspired that order, appears to have dissipated and three years later by order of this Court (Geoghegan J.) as dated 22nd June, 1998, the first and second named defendants were ordered to make further discovery of specific documentation. The subject matter of the judgment of Laffoy J. as delivered on 1st March, 2006, was an appeal from an order of the Master on foot of a motion for further and better discovery which the plaintiff issued on 17th May, 2004, seeking particular documents. The Master previously on 10th December, 2004, had directed discovery of Category D as sought by the plaintiffs which was access for the plaintiff and his experts to the full database of all vehicles registered for VRT as would allow them to conduct such studies as are necessary to establish the manner in which the tax has been administered and the appeal itself comprised certain other categories described as A, C and E ,and in the judgment of Laffoy J. an order was made for discovery in the terms of para. C of the notice of motion.

 

35. Accordingly, it is clear that there were very significant issues with discovery and suffice to say it does not appear that the plaintiff is in any significant way criticised in this regard. In fact, it appears to this Court in reading the judgment of Laffoy J. of 1st March, 2006, that the plaintiffs were pursuing very particularised and intricate data obviously with a view to instructing their expert witnesses. I do not consider that the costs of the proceedings were increased by the manner in which the proceedings were pursued by the plaintiff company. I accept that the trial judge made reference to the extent of the plaintiffs claim for monetary damages in the sum of €130m, but he did so by reference to the pleadings and the components of the claim and stated that he found it difficult to see how the claim could arise. He did not make any determination on the evidence adduced before him as to the level of damages the plaintiff may have been entitled to if successful in the claim. In all the circumstances in this regard the submissions on the defendants behalf that the proceedings were not pursued reasonably or in a reasonable fashion do not find favour with the court.

 

36. I take the view that having regard to the fact that this Court has to exercise its discretion in a reasonable manner, it is necessary to consider the aspect as to whether or not Mr. O’Dowling was put on reasonable notice of the consequence of his actions and I am satisfied to accept that prior to 22nd March, 2012, he was not on notice but clearly with the letter of 22nd March, 2012, he was on notice.

 

37. I further take the view in the exercise of my discretion that I have regard to the views which were cited with approval and adopted by Clarke J. in Moorview in respect of the New Zealand decision of Carborundum Abrasives Ltd v. Bank of New Zealand (No.2) [1992] 3 NZLR 757 and the judgment of Tompkins J. wherein he expressed the view that discretion to award costs against a non-party should only be exercised against a person standing behind a company litigant in exceptional circumstances. Such an order would be justified only where the circumstances demonstrated that the connection or involvement was such as to justify the making of what one accepts should be regarded as an exceptional order.

 

38. I consider it appropriate to state that in normal circumstances clearly it is preferable that an application such as this be made to the trial judge. In this instance that was not possible.

 

39. The conclusion of this Court is that the order as sought has to be regarded as exceptional. Having considered the judgment of Clarke J. in Moorview, I am satisfied that there are a number of distinguishing factual features with this case which I have referred to herein. The court is satisfied that if the plaintiff company was to fail with the principal proceedings herein, it was always reasonable to conclude that the company was not going to be in a position to meet any award of costs made against it. Mr. O’Dowling was going to benefit financially resulting from the proceedings if they were successful, but he was not a professional funder without a connection to the litigation. The proceedings in the view of this Court were pursued reasonably and in a reasonable fashion and were decided by the trial judge on the basis of a preference of the defendants’ factual and expert evidence, as against that offered on the plaintiffs behalf. Mr. O’Dowling was not on notice of the order as sought herein prior to receiving the letter of 22nd March, 2012, on the 11th day of the hearing of the proceedings before the trial judge.

 

40. Insofar as the defendants rely on the offer as contained in the letter of 22nd March, 2012, it has to be borne in mind that the company was the plaintiff and not Mr. O’Dowling.

 

41. The outcome to this application is relatively finely balanced and the onus rests on the defendants as the moving party. I do not consider that the evidence and submission of the defendants is sufficient to satisfy this Court that in the exercise of its reasonable discretion Mr. O’Dowling should be joined as a fifth named defendant to the within proceedings and should be directed to be personally liable for the costs awarded in favour of the first, second, third and fourth named defendants in these proceedings.

 

42. Accordingly, the reliefs as sought by the defendants herein pursuant to the notice of motion as dated 15th March, 2013, are refused.

Butler & Anor -v- Nelson & Co Solicitors

[2017] IECA 149 (10 May 2017)

JUDGMENT OF MR JUSTICE MICHAEL PEART DELIVERED ON THE 10th DAY OF MAY 2017

1. There are two notices of appeal filed by the appellants. One is stated to be in respect of an order of High Court (Hogan J.) dated 20th December, 2013. However, this may be a clerical error since that particular order, inter alia, merely corrected part of an earlier order dated 21st October, 2013. It is clear that the appellants’ intention was to appeal against part of the latter order in its amended form. In its amended form the order dated 21st October, 2013, as relevant to the appeal, ordered that:

“1. The particulars numbered 23.2 and 23.3 of the plaintiffs’ claim as disclosed in the plaintiffs’ reply to particulars dated the 18th September, 2013 be struck out in their entirety.
2. The plaintiff [sic] do file replies to particulars 23.1 and 23.4 of the plaintiffs’ reply to particulars dated 18th September, 2013 and the claim is now confined to the two claims as disclosed in these particulars”.

2. The second appeal, which is in truth the only appeal which the appellants moved before this Court when the appeals were listed for hearing, is against the order made by the High Court (Baker J.) dated 17th October 2015 in which at the conclusion of the plaintiffs’ evidence she dismissed the plaintiffs’ claims on the basis that they were bound to fail, having heard an application in that regard by the defendants.
3. I should add, in relation to the first notice of appeal, that in any event the grounds of appeal rely upon evidence that was not before Hogan J. when the motion in question was heard by him, namely a report from Mr Charles Russell, accountant. That report, and the complaint by the plaintiffs that the trial judge wrongly refused to allow him to give certain evidence which relied upon his having inspected certain Anglo bank statements which the plaintiffs had failed to discovery as part of what is referred to as Category 4 pursuant to an order of Hogan J. dated 13th January, 2014, was addressed by Mr Michael Butler as part of his arguments made on the second appeal, and he agreed, when asked by Ryan P. towards the end of the appeal hearing, that if the issue around Mr Russell’s evidence was dealt with in the second appeal, it effectively dealt also with the first appeal.

4. Only Mr Michael Butler appeared before the Court to prosecute his appeal. He was unrepresented, but was accompanied by Ms. Farrell, his former solicitor, and she sat beside him as his so-called ‘McKenzie friend’ in order to ‘assist’ him. Mr William Butler did not appear for the purpose of prosecuting the appeal at all, and was not represented. This Court was informed by Michael Butler that his brother William Butler was in England in an effort to earn a livelihood, but that he had been kept informed by him of all the dates on which the appeal was before the Court of Appeal for directions from time to time, and of the date fixed for the hearing of the appeal, and that he was fully aware that the appeal was listed for hearing.
The ‘McKenzie Friend’
5. Before addressing the appeal itself, I would like to say something about ‘McKenzie friends’ generally, and about Ms. Farrell’s involvement in that capacity in the present appeal. To put my remarks in context I will give a very brief procedural history of this case.

6. When these plaintiffs issued a plenary summons against the defendant on the 9th February 2009 they did so in a personal capacity, as they were entitled to do. Some months later they delivered a statement of claim, again prepared by them personally. Following the delivery of a notice for particulars on the 26th May, 2009 by the defendant’s solicitors, the plaintiffs furnished replies thereto dated 29th October, 2009 – again, it would appear, having prepared those replies themselves without the assistance of a solicitor. They consulted a solicitor (Mr Byrne) in 2011, and he furnished additional replies to the notice for particulars. Not being satisfied with the replies given in relation to particulars 18 and 23 of their notice for particulars, the defendants issued a notice of motion on the 13th March, 2012 seeking to strike out the plaintiffs’ claim for failure to adequately provide these particulars, or alternatively an order requiring the plaintiffs to furnish full and detailed particulars to 18 and 23 aforesaid. That motion was served upon Mr Byrne as the solicitor on record for the plaintiffs at that time. However, by the time the motion came before Hogan J. for determination on the 21st October, 2013 the plaintiffs had consulted Ms. Angela Farrell, who was then a practising solicitor. She had come on record for the plaintiffs in these proceedings and appeared for them before Hogan J, according to the order as drawn up. I have already set out the relevant parts of the order made by Hogan J. in paragraph 1 above, and note in particular that he directed that the case was thereafter confined to the two issues related to particulars 23.1 and 23.4 of the plaintiffs’ reply to particulars dated 18th September, 2013. I take that to refer to the only two heads of loss that the plaintiffs were permitted to rely upon, assuming that they succeeded in establishing liability against the defendant.

7. By the time the case came on for hearing before Baker J. on the 3rd March 2015 and following days, Ms. Farrell was no longer the solicitor on record, she having been struck off the roll of solicitors in 2014. At the hearing in the High Court the first named plaintiff, Michael Butler, represented himself even though his brother, William, was represented by solicitor and counsel.

8. It is a sad fact of life that many litigants nowadays cannot afford to pay for the services of a solicitor, let alone counsel in addition, to represent them as either plaintiff or defendant in their legal proceedings. Legal services are expensive by any standards. Such litigants find themselves having to present their own cases because they cannot afford a lawyer. In many such cases their opponent will be legally represented which serves to increase their own sense of disadvantage notwithstanding the assistance which the trial judge will feel it reasonable and fair to provide in order to ensure a fair and proper hearing.

9. More and more such litigants are finding it helpful to be accompanied in court by what has become known as a ‘McKenzie friend’, so-called because of the decision of the Court of Appeal (McKenzie v. McKenzie [1970] 3 All ER 1034) which concluded that the trial judge was in error to have refused to permit a friend to give advice and assistance to Mr McKenzie. As it happened that friend was a qualified Australian barrister who was then working in the firm of solicitors who had at one time represented Mr McKenzie, until he could no longer afford to retain them. Davies L.J noted in his judgment in the appeal that the case was complicated and had lasted some ten days in the High Court. He described it as “a difficult case for a man with an untutored mind to conduct”. The barrister friend duly absented himself from the court when he was refused permission to assist Mr McKenzie, who then successfully appealed on that ground, and achieved a rehearing of his case.

10. In his judgment, Sachs L.J. stated that the husband was fully entitled to have the assistance that the Australian barrister was willing to provide on a voluntary basis. He noted that there had been no subsequent criticism of what was said by Lord Tenterton C.J in Collier v. Hicks [1831] 2 B & Ad 663 at 669 that “Any person, whether he be a professional man or not, may attend as a friend of either party, may take notes, may quietly make suggestions and give advice …”. Sachs L.J. concluded with the following at p. 1039:

“ … I am fully aware that this particular litigant was one who was described by the learned trial judge as adroit, and nimble, and one able to try to turn matters to his advantage; that he was rated to be a remarkably intelligent and astute person; and that he was able to’ think on his feet’ and (as the trial judge put it) to make any trick which he thought he could capture. I’m also aware and give full credit to both the trial judge and counsel for having rendered every practicable assistance to the husband, endowing him, perhaps, with certain advantages that he would not have had if he had been represented by counsel. Nonetheless, at the end of the day one comes to this: as counsel for the husband aptly pointed out, all the assistance a litigant in person gets from a judge and from opposing counsel is not really the same thing as having skilled assistance at his elbow during the whole of a lengthy trial. In those circumstances it has not been shown that there was no prejudice to the husband on the adultery issue through lack of the assistance which he ought to have had. It is moreover always, to my mind, in the public interest that litigants should be seen to have all available aid on conducting cases in court surroundings, which must of their nature to them seem both difficult and strange. I too agree that in those circumstances there should be a new trial on the one issue to which Davies L.J has adverted.” [emphasis added]
11. It is not surprising therefore that judges in this jurisdiction also and for much the same reasons regularly permit an unrepresented litigant to be assisted in court by somebody who is in a position to render that assistance, when so requested. Indeed, such assistance can be of benefit to the court itself, and not just the litigant, especially where the person assisting has some legal knowledge or experience with which to explain matters to the litigant in language which he understands, or can simply provide moral support to the litigant in this difficult and often challenging court environment, whether through personal friendship, family relationship or otherwise.
12. The assistance of a ‘McKenzie friend’ can often be helpful to an unrepresented litigant. In my view, a judge should be slow to refuse to permit a litigant to be assisted in this way, and then only for good and specified reason. While it is subject to the exercise of judicial discretion in each case, absent some clear reason to justify refusal, it ought to be permitted.

13. In these few remarks I have been at pains to emphasise the word “assistance” that can be provided by a McKenzie friend. It may happen that in a particular case the presence of a McKenzie friend is of little or no assistance, and may indeed become a hindrance to the proper conduct and fairness of the hearing. This will sometimes be because the friend misunderstands his role, or has an agenda of his own. It is a limited role. The intended assistance, apart from moral support, is to take notes, assist with the documents being referred to, and perhaps quietly prompt or remind the litigant of points to be made. It is a passive and limited role so as not to unreasonably interrupt the hearing by constant whispering of hints and suggestions to the litigant. Ultimately it is for the presiding judge to conduct the hearing in a way that is fair to both parties. The judge may give directions to the personal litigant, or even directly to the friend, in order to ensure that the friend’s involvement does not overstep the intended role by causing a disruption to the even flow of the hearing. Any such directions must be complied with, and any person who is acting as a McKenzie friend must understand the judge’s role and the importance of complying with any such directions. Otherwise, the litigant runs a risk that the judge, in the exercise of his discretion and so that the hearing proceeds in an orderly and fair fashion, may refuse to permit the friend to continue in that role.

14. I have seen fit to make these few remarks in relation to the role of the ‘McKenzie friend’ because this case has provided an opportunity and indeed, a need to do so. In my view Ms. Farrell overstepped the mark in the way in which she sought to “assist” Mr Butler. Far from the kind of passive involvement which I have described, she was active to the point of greatly exceeding her role. She was both seen and heard to constantly interrupt what Mr Butler was saying to the court, sometimes even to his apparent irritation. On many occasions when members of the court asked a question of Mr Butler he had only commenced to answer the question when he was interrupted by whisperings from Ms. Farrell who was attempting to tell him how to answer the question. Her involvement was certainly not of assistance to the court. Members of the court were attempting to fairly assist Mr Butler in identifying the real issues that he needed to address in his appeal, and to ensure that he himself was aware of what those real issues were. This interaction between the members of the court and Mr Butler was seriously hindered by the way in which Ms. Farrell interposed herself between the questions from the bench and responses by Mr Butler.

15. In my view the Court would have been justified in directing Ms. Farrell to remove herself from Mr Butler’s side, and to continue her presence in court from a seat sufficiently removed from him to prevent her from interrupting him, or offering further ‘assistance’, and failing that, by requiring her to leave the court. In my 15 years experience as a judge both in the High Court and this Court, I have never been given cause to contemplate requiring a ‘McKenzie friend’ to cease that role. My own experience of the ‘McKenzie friend’ has on the whole been a positive one, and on the few occasions when I have had to direct the ‘friend’ in any way, such directions have been fully complied with. I cannot say the same of Ms. Farrell. She was on many occasions during the course of this appeal asked by members of the Court to allow Mr Butler deal with a question or matter raised from the bench without interruption and to desist from interrupting the hearing by her desire to say something to him. She seemed unable or unwilling to comply with these requests. This was not of any assistance either to Mr Butler or to the court.

16. I am not the first judge to express both approval and yet some caution around the question of the ‘McKenzie friend’. Lord Donaldson had cause to express himself in the following way in R v. Leicester City Council, ex. parte Barrow [1991] 2 Q.B. 260, an appeal against the refusal to allow such assistance to Mr Barrow who in judicial review proceedings sought to challenge his liability to pay a poll tax. In this regard, Lord Donaldson stated:

“If a party arms himself with assistance in order that better himself to present his case, it is not a question of seeking the leave of the court. It is a question of the court objecting and restricting him in the use of this assistance if it is clearly unreasonable in nature or degree, or if it becomes apparent that the ‘assistance’ is not being provided bona fide, but for an improper purpose or is being provided in a way which is inimical to the proper and efficient administration of justice by, for example, causing the party to waste time, advising the introduction of the relevant issues or the asking of irrelevant or repetitious questions.”
17. It may well be time for some guidelines to be published so that persons who undertake the role of McKenzie friend are fully aware of the nature of the role they are undertaking, its limitations, and the obligations to the litigant and to the court that they undertake. It is a role which has the capacity to assist the litigant and the administration of justice when properly exercised. However, it is important that its proper limits are understood and respected.
The High Court proceedings
18. The plaintiffs’ claim as originally set forth in their plenary summons was straight forward and was set out with brevity. It was a claim that the defendant firm, as their solicitors, failed in its duty to them, and conspired with others to perpetuate a fraud upon them, causing them loss and damage for which they sought to be compensated in a sum of €5,000,000 together with costs.

19. Some flesh was put on these bare bones when the plaintiffs delivered their statement of claim – again a commendably succinct document extending to just 13 short paragraphs. These referred to the defendant firm having undertaken to act for them in relation to a business partnership involved in a property development via a company called BOSOD Limited in which the two plaintiffs held between them a 50% interest. It alleges that the parties holding the other 50% interest (namely a Mr Crohan O’Shea and Mr Tom O’Driscoll) offered virtually no assistance or security to the development company, and that despite this, the defendant firm “oppressed the plaintiffs into accepting that the other parties should have a 50% shareholding in the company”. They alleged also that the defendant firm structured the company so that Mr O’Shea had a casting vote at meetings of BOSOD. They alleged that the defendant firm “preyed on [their] commercial naivety and ignorance of commercial law” enabling the other shareholders to act in a way detrimental to the plaintiffs. They alleged also that the defendant firm acted “in cahoots” with the other shareholders, and in particular Mr O’Shea, being a person with whom the firm enjoyed an existing and longstanding professional relationship.

20. The statement of claim then proceeded to outline certain provisions of a building agreement prepared by the defendant firm, and allege that this agreement was worded in such a way that all finances which were to the benefit of the development company were channelled into a bank account which was under the control of the defendant firm and Mr O’Shea, and to their benefit and to the detriment of the plaintiffs. They allege that the defendant firm refused to carry out an instruction given to it by the plaintiffs to transfer funds from its client account into the Waterford branch of Anglo Irish Bank, stating that it would accept instructions in this regard only from Mr O’Shea. This sum (€98,000) was alleged to be owed to Anglo in respect of the property development, and its discharge would have yielded a significant financial benefit to the plaintiffs.

21. The statement of claim concluded with a plea that the defendant firm had betrayed and abused the trust which the plaintiffs placed in it, and as a result they sought damages, including punitive damages.

22. A detailed notice for particulars was delivered by solicitors acting for the defendant firm. Included in this request for particulars were those made at paragraphs 18 and 23 relating to the losses alleged to have been suffered by the plaintiffs, the replies to which were considered incomplete, resulting in a motion to strike out the proceedings for failure to properly provide particulars, or alternatively an order directing the plaintiffs to provide full particulars of the losses in question. I have referred to that motion in paragraph 3 above, and to the nature of the order made by Hogan J. in paragraph 1 above where the losses claim was confined to those related to particulars 23.1 and 23.4 in the plaintiffs’ reply to particulars dated 18th February 2013, namely

(a) the loss of half the value of their Clonmel lands, being the fraction which the plaintiffs committed to their partnership with Crohan O’Shea and Tom O’Driscoll,
and

(b) the loss of the monies advanced to the plaintiffs on behalf of the partnership by the plaintiffs’ brothers and sister in circumstances where the defendant, at the instance of Mr O’Shea, was frustrating the use of the partnership’s own funds.

23. A full defence was delivered by the defendant, commencing with a denial that the plaintiffs claim disclosed any cause of action against the defendant firm. The defendant acknowledged that it acted as solicitors for the plaintiffs in the period from 30th July, 2003 to August, 2006 in respect of the conclusion of sales of houses but that it had ceased to act generally for them from March, 2004 when the plaintiffs appointed other solicitors to act for them personally. The defence pleads that the extent of the defendant’s retainer was in connection with the partnership agreement being entered into by the plaintiffs with Mr O’Shea and Mr O’Driscoll for the development of the Clonmel lands (Airmount), and acknowledges also that in that capacity it owed a duty of care in relation to advice and representation “to the extent that such advice and representation was sought”. All the allegations of wrongdoing were denied, and it was pleaded also that at all times the defendant acted upon the instructions of the partnership, and not any individual member or members of the partnership because of disputes that existed between the plaintiffs and the other two partners, and that it so informed the two plaintiffs. The defendant in its defence also pointed to the lack of particulars provided by the plaintiffs in relation to their claims, and referred to the confinement of the loss and damage claim as ordered by Hogan J. by his order dated 21st October, 2013 to which I have referred at para. 21 above. In respect of those claims the defendant pleaded as follows at para. 28 of the defence:
“28. The loss and damage to which the plaintiffs are now confined by Order of Mr Justice Hogan made 21 October, 2013, is not recoverable in all the following respects:-

(a) In the first instance, the plaintiffs have acknowledged by virtue of the Partnership Agreement that they held the ownership of the property then described as “Airmount” in trust for themselves, Crohan O’Shea and Tom O’Driscoll and the stated purpose of the Partnership Agreement was to develop the same site. In the premises, the furnishing by the plaintiffs of the property for the development was precisely what was agreed between the plaintiffs and their then partners as representing the contribution by the plaintiffs. The stated purpose of the Partnership Agreement included redemption of liabilities of the plaintiffs to First Active Plc as well as the funding of the development. In the premises, the plaintiffs have no claim against the defendant for making available the property for development, where this was precisely what they had agreed and contemplated by the Partnership Agreement. No facts have been set out by the plaintiff’s which justify the assertion of loss by reference to the value of the property or any part thereof as a viable measure of loss. The defendant will contend that such loss was excessively remote, irrecoverable as well as having no connection with the matters articulated by the plaintiffs.
(b) In respect of the second head of loss now relied upon by the plaintiffs, such does not in truth constitute a loss at all. The existence or otherwise of funding requirement and the need, for reasons as yet not fully disclosed by the plaintiffs, to seek funding from third parties, does not give rise to a cause of action in its own right. To the extent that the plaintiffs have not sought to advance a claim in respect of any loss of funds and have not sought to advance any entitlement to an account against the defendant in these proceedings as currently constituted, and having failed to furnish any details of any actual loss by reference to the non-accounting for funds, it is denied that the plaintiffs are entitled, as an alternative, to advance the source of alternative funds as a measure of damages. No admission is made by the defendant that the plaintiffs in fact sourced funds from their relations as contended, or for the purposes alleged.”

24. This case was subjected to careful and extensive case management on many occasions by Hogan J. prior to its ultimate hearing before Baker J. commencing on the 3rd March, 2015. In fact this Court was told that case management had taken place over 20 months, and that the case had been listed already on 99 separate occasions. Mr Justice Hogan made numerous orders with a view to ensuring that the issues were clearly identified, and that the case was ready as far as possible for hearing. Among the orders made by him were certain orders for non-party discovery made on 30th May, 2014 whereby, on the first plaintiff’s application, he made discovery orders against IBRC (formerly Anglo), and against a firm of accountants, LHM Casey McGrath. However, each such order was stayed until such time as the first named plaintiff furnished a suitable indemnity in respect of the cost of such discovery. That was never done. In his evidence in the High Court this was acknowledged to be so by Michael Butler, but he explained that this was because he could not afford that cost. In these circumstances that non-party discovery never materialised, and the orders made were vacated by later of Hogan J..
25. Another order made by Hogan J. is one dated 13th January 2014 whereby the plaintiffs were ordered to make certain discovery including what is referred to later as Category 4 relating to an alleged frustration by the defendant of the use of partnership funds by the plaintiffs. The trial judge was satisfied that the discovery ordered to be made by the plaintiffs in respect of Category 4 documents included certain Anglo bank statements. The plaintiffs did not make discovery of those Anglo bank statements even though they were within their power or procurement. This had the consequence for the plaintiffs that during the hearing Baker J. did not permit the plaintiffs’ accountant Mr Charles Russell, to give certain evidence which the plaintiffs wanted him to give concerning a partnership loan from Anglo Irish Bank. The evidence which the plaintiffs wanted him to be permitted to give was in relation to what he gleaned from an inspection by him of the relevant Anglo bank statements at the offices of Ms. Farrell. Since those statements came within Category 4 of the discovery that was ordered, and that discovery of these bank statements had not been made by the plaintiffs even though they were in the possession of the plaintiffs’ then solicitor, Ms. Farrell, Baker J. ruled that Mr Russell could not give that evidence. Baker J. made a ruling in respect of Mr Russell on 19th March, 2015 to which I shall refer again later in this judgment. He had been able to give some evidence in accordance with some of his witness statement, mainly in relation to what appeared on a spreadsheet of transactions related to partnership funds, though his ultimate position was that he had not been provided with sufficient documentation to know precisely what the position was. But he was precluded from giving evidence on foot of his inspection of the Anglo bank statements.

26. In addition, on the 19th December, 2014, Hogan J. made the following order, which assumes some relevance during the hearing of the action before Baker J.:-

“IT IS ORDERED that the plaintiffs do not later than 5 o’clock in the afternoon on the 13th January 2015 furnish witness statements to contain inter alia (i) the heading of the proceedings, (ii) the name of the witness, (iii) the nature of the evidence in succinct terms, (iv) what loans were advanced to whom for how much any losses incurred and how, (v) how any losses incurred are related to an alleged breach of contract herein.”
27. While certain witness statements were furnished in respect of witnesses that the plaintiffs wished to call, including one by Mr Charles Russell, accountant, there was no witness statement furnished in respect of Ms. Angela Farrell. Towards the end of the plaintiffs’ evidence before Baker J. the plaintiffs sought to call Ms. Farrell to give evidence. At that point counsel for the defendant objected on the basis that no witness statement by her had been provided in accordance with the directions of Hogan J. some months previously. The trial judge asked for clarification of what her intended evidence would be. Michael Butler, representing himself, responded that Ms. Farrell had in fact made a witness statement, and that this was evident from the fact that Mr Nelson in his own witness statement had referred to it. But it turned out that this was a reference to a statement of evidence by Ms. Farrell which had been presented to Hogan J. at a directions hearing, but rejected by him because he was dissatisfied with the contents of the statement, and suggested that it be looked at again and prepared afresh. No new witness statement was ever prepared by Ms. Farrell thereafter. Mr Michael Butler, who wished to call Ms. Farrell to give evidence at the conclusion of the other plaintiff evidence, submitted to Baker J. that Ms. Farrell was an expert witness, and that she had relevant knowledge of what had gone on in relation to their complaints about funding against the defendant. It was said that she had evidence to give in relation to correspondence between herself and Messrs. L.K. Shields, acting for the defendant. However, Baker J. ruled that if she was an expert, it could only be in the relation to conveyancing, and that as neither plaintiff was making any complaint against the defendant in relation to the conveyancing work done by the defendant connected with the loan or the housing development her expertise was not a relevant expertise. Baker J. ruled that she could not give evidence of financial matters because she was not involved in relation to those issues.
28. It should be added that the trial judge refused the application to permit Ms. Farrell to give evidence in relation to the financial complaints also because her evidence was going to relate to information gained from her knowledge of the bank statements of the Anglo loan accounts which she had made available to Mr Russell in her office, and which had not been discovered as ordered by Hogan J. The trial judge ruled that in such circumstances Ms. Farrell could not be permitted to give that evidence.
Non-Suit application
29. The plaintiffs gave their evidence over a period of some six days of hearing. I will not attempt a summary of that evidence from the transcript. But at the conclusion of the plaintiffs’ case, counsel for the defendant made an application for a non-suit on the basis that despite all the evidence given there was no case made out based on the claims as pleaded for the defendant to answer, and the evidence that had been given by and on behalf of the plaintiffs, and that their case was bound to fail. In making that application counsel, as he was required to do, confirmed to the court that if his non-suit application failed, his client would go into evidence.

30. Having heard the submissions by counsel for the plaintiff, and those made by counsel for William Butler and by Michael Butler representing himself, the trial judge reserved her judgment on the application, and in due course delivered a detailed written judgment on the 20th October 2015 in which she granted the application and dismissed the plaintiffs’ claims. The present appeal is against that judgment and order.
The claims in conspiracy and fraud
31. The trial judge commenced her judgment by setting out a brief background to the claims being made. She then referred to the fact that when these proceedings were commenced the plaintiffs were both un-represented, and stated that “it was difficult to discern precisely what claims the plaintiffs made”. She acknowledged the assistance of counsel representing the second named plaintiff who formulated the claim as being “one against the defendant firm of solicitors for breach of contract and/or negligence in and about legal advice alleged to have been given to the plaintiffs concerning the setting up of the partnership”. She noted that in so far as the statement of claim (drafted by the plaintiffs themselves) had alleged that the defendant was “in cahoots” with the other partners, counsel for William Butler had accepted that this expression was not intended to import any claim of fraud or conspiracy, but was intended to convey a complaint that the defendant had favoured the other half of the partnership over the plaintiffs, and that he had not acted with the interests of the whole partnership in mind, and where disputes arose had preferred the interests of the other partners over those of the plaintiffs.

32. Before proceeding further I should refer to the fact that on day 3 of the hearing it was again confirmed by counsel for William Butler that the plaintiffs were not alleging conspiracy or fraud against the defendant. I mention that now because in their notice of appeal to this Court the appellants state as follows:

“The claim for fraud remained but on the hearing date the legal team for Mr William Butler prevailed upon him to remove the claim of fraud. The claim that Mr Nelson had acted to defraud remained for Mr Michael Butler.”
33. It is necessary to refer to a couple of passages from the transcript for Day 3 in relation to the question of whether any claims based on conspiracy and fraud were withdrawn only by William Butler through his counsel, and not by Michael Butler. I will set out the relevant passages. In my view, having read the transcript closely it is beyond argument firstly, that counsel for William Butler, in answer to very specific questions from the trial judge, informed her that the fraud claim was withdrawn, and further when asked if he was formally withdrawing any part of the claim that was framed or could be deemed to be framed as conspiracy, counsel replied: “yes – and I’m saying that what I am alleging is that where the defendant purported to act for four co-venturers, if he preferred one of the co-venturers over another then that was a breach of duty” [see Day 5, pp. 10-12]. This concession has to be seen in the context of the questions from the trial judge at the conclusion of Day 2 when the nature of the plaintiffs’ (plural) claims were explained to the trial judge. The trial judge stated that as she understood the claims, as then being characterised, it was not a claim in fraud. Counsel confirmed that was the position. There was no demur by Michael Butler to what was stated in this regard. Counsel for the defendant at that point stated that he was “glad to see the back of the fraud claim”, but went on to say that he would prefer it to be specifically withdrawn. Counsel said that he would need to take instructions specifically overnight and that he would clarify the matter the following morning. That is the context in which on the following morning, as I have already set forth, the trial judge asked what was the position about the fraud claim, and when counsel said “That’s withdrawn”. There was nothing to indicate that this applied only to William Butler but not to Michael Butler. Neither did Michael Butler demur in any way.
34. At the commencement of Day 3 there was also a further exchange between counsel and the trial judge in relation to a claim for breach of fiduciary duty owed by the defendant to the plaintiffs. The trial judge at that stage directed that the plaintiffs clarify precisely what they were alleging in relation to breaches of fiduciary duty so that the claims being made in the case were clear before the evidence commenced. The plaintiffs were directed to provide such particularisation by the following Monday.

35. At this point in Day 3 the trial judge was still at pains to ascertain precisely what claims were still being maintained by the plaintiffs. She was clearly conscious that counsel appeared only for William Butler, and wanted to know Michael Butler’s position in relation to any claims made in fraud and conspiracy. The following exchange with Michael Butler ensued in this regard:

Judge: I do need the other defendant to confirm the position. Mr Michael Butler, you are representing yourself. Counsel who acts for your brother has withdrawn the claim in conspiracy. Are you taking the same position?
Mr Butler: Well, my barrister agreed yesterday evening that I would follow the line taken by him in respect of my brother William.

Judge: But he is not your barrister, Mr Butler. Is this Mr Dixon?

Mr Butler: Well, okay he made a submission to the Court yesterday afternoon.

Mr Jackson (counsel for William Butler): I think he is talking about me.

Judge: .He’s talking about you?

Mr Jackson: Yes.

Judge: You are going to be behind [Mr Jackson] – he can speak for you even though he doesn’t represent you.

Mr Butler: Yes. [my emphasis]

Judge: We will work with that for the moment.

36. In my view it is clear that when the court was informed by counsel for William Butler that the fraud claims were withdrawn, it was a statement intended by counsel to be in respect of both Mr Butlers. It is also clear also that Michael Butler confirmed when questioned by the trial judge that he was following the line being taken by counsel on behalf of William Butler. The case thereafter proceeded by both plaintiffs on the basis that neither fraud nor conspiracy was in the case.
37. On the appeal before this Court Michael Butler was referred by the Court to this passage of the transcript, when in his submissions he was still alleging fraud against the defendant. In answer, Mr Butler said that while he had withdrawn any claim in conspiracy, he had not done so in respect of fraud. In that regard he was clearly referring to the specific words of the question asked of him by the trial judge when she asked: “Counsel who acts for your brother has withdrawn the claim in conspiracy. Are you taking the same position?” But that question has to be seen in the context of the earlier passages of the transcript of that day, and indeed in the context of the trial judge’s urgings on the previous evening that the position in relation to the fraud claims should be made clear on the following morning.

38. Michael Butler cannot now on this appeal attempt to argue that those claims continued to be maintained by him. In so far as he refers to the precise words of the question put to him by the trial judge, in isolation from the context to which I have referred, Michael Butler is indulging in an exercise of dissembling, and this ought not to be permitted, as to do so is to permit an abuse of process.
The judgment of Baker J. on the non-suit application
39. In the light of what the trial judge accepted was the position of both plaintiffs, namely that the claims based on conspiracy and fraud were withdrawn, she proceeded in her judgment to summarise the remaining claims as being in breach of contract, negligence, and breach of fiduciary duty. She did so by reference to updated particulars of claim provided to her by the solicitors acting for the second named defendant, William Butler. There is no appeal by Michael Butler against the way in which the trial judge described these remaining claims by reference to that document. The breach of contract claim is described as follows:

“The plaintiff claims that the defendant was in breach of his contract with the second plaintiff in:-

(a) Failing to take proper steps to ensure that the second plaintiff took independent advice. This is not pleaded with any particularity and in particular, it is not stated, the matter in respect of which it is alleged that this step ought to have been taken by the defendant.
(b) Acting for the partnership after it became apparent there was a breach of trust and/or preferred some of the partners over the others.

(c) Incorporated a company called BOSOD Ltd but failed to ensure that it “performed its proper function” in relation to the partnership.

(d) Dispersed partnership funds and thereby left the plaintiffs short of funds to carry out the building works.

(e) Failed to make any payment out of partnership funds to the plaintiff.

(f) Acted for the partnership and/or BOSOD Limited when he knew or ought to have known that his previous professional relationship with one of the partners made it impossible for him to be independent, and/or failed to disclose the extent and/or duration of that professional relationship.

(g) “Engineered” the breakdown of trust between the partners.

(h) Made disbursements in a “chaotic” way thus causing “confusion and suspicion.”

40. The claim in negligence was described in the following terms:-
“The claim is formulated in negligence in somewhat different [terms] although there is a significant overlap. The matters pleaded in respect of alleged breach of contract are also alleged against the defendant under the heads of alleged breach of negligence, but there is a specific plea that the defendant “failed” to give independent advice and/or “failed” to give equal weight to the interests of all the partners. There is also a specific plea that the defendant closed the sale of various house sites without “due regard for” any payments that might be due to the legal owners of the lands.”
41. The claim in respect of alleged breach of fiduciary duty is described as follows:-
“There is an additional plea that the defendant was in breach of fiduciary duty in failing to give an account of the disbursement of partnership assets, and/or failed to treat all partners equally.”
42. Having set out that summary of the remaining claims, the trial judge then considered the legal basis on which an application for a non-suit must be considered by the court. Having noted that counsel for the plaintiff had confirmed to the court that in the event that the application was unsuccessful, the defendant would go into evidence, she then referred to the decision of the Supreme Court in O’Toole v. Heavey [1993] 2 I.R. 544, which held that in considering an application for the dismissal of the plaintiff’s claim the court must approach the evidence by taking the plaintiff’s case at its highest, and that the court should consider whether the plaintiff had made out a prima facie case on the balance of probabilities. The trial judge stated:
“The court must also, at this juncture, not have any regard to the witness statements which have been filed on behalf of the defendant, or to certain documentation introduced in the course of cross-examination of the plaintiffs although witnesses save and insofar as the accuracy of the information in those documents was accepted by those witnesses in cross-examination.”
43. There is no appeal against the trial judge’s statement of the legal test to be applied in relation to applications of this kind, and the evidential basis on which it falls to be considered. Michael Butler made no complaint that the test, though correctly stated, had been misapplied to the evidence adduced by the plaintiffs. Having said that however, and since Michael Butler is unrepresented on this appeal, it is only fair that I should state my respectful agreement with the test stated by the trial judge, and her application of that test to the evidence which was given.
44. The first question addressed by the trial judge in her judgment was the evidence adduced by the plaintiffs of the nature and the extent of the defendant’s retainer in relation to the partnership agreement in June/July, 2003. As set forth in para. 39 above, their complaint in relation to this aspect of the case is, as clarified at the trial judge’s request, that the defendant solicitor failed to take proper steps to ensure that the second plaintiff took independent advice. Given that Michael Butler had stated to the trial judge that he “would follow the line taken by [William Butler’s counsel] …” and confirmed to her that even though that counsel did not act for him he could speak for him (day 3, p.8), I take that clarification of the heads of claim to apply also to Michael Butler.

45. The trial judge considered the evidence adduced in relation to the defendant’s retainer. She noted that when the Clonmel lands had been bought by the Butler brothers in 2003 Messrs. Houlihans solicitors of Ennis had acted for them in that purchase. Indeed, she noted that that firm had registered a judgment mortgage against those lands in respect of legal fees owed.

46. The evidence of the plaintiffs was that these lands had been bought with the assistance of a loan from First Active Plc earlier in 2003 which was secured on these lands by a first charge. They had a planning permission for 111 houses on the site. That loan was not being serviced in accordance with its terms, and First Active was either threatening to appoint a receiver, or had done so. The Butlers needed funding in order to construct the houses, otherwise they risked losing the site. They sought to refinance, and in this regard in June 2003 they were introduced to Tom O’Driscoll. They discussed the matter with him, and he appears to have introduced them to Crohan O’Shea who was apparently well connected to Anglo Irish Bank. A meeting with Anglo then followed.

47. She noted also that when the four partners had first discussed getting together in order to develop the Clonmel lands they had conducted their pre-partnership agreement negotiations among themselves, all of whom were experienced business men, without the benefit of legal advice. However, when it became necessary for some legal documentation to be signed, Mr Nelson became involved, and he had prepared a short document characterised as “an agreement to agree” and which became referred to as “the Shelbourne agreement” which was signed by the four intending partners on the 18th June, 2003. It is not in dispute that Mr Nelson had for some years acted for Crohan O’Shea and that this is how he came to be asked to prepare the ‘Shelbourne agreement’.

48. A loan facility letter dated 25th June, 2003 in the sum of €5.4 million issued from Anglo, and was addressed to Crohan O’Shea, Tom O’Driscoll, William Butler and Michael Butler. The Butlers each signed their acceptance of this facility. The security to be provided included a first charge on the Clonmel lands owned by both Butlers, as well as a first charge over lands owned by William Butler at Lewagh More, Thurles.

49. The intention was that there would be an initial drawdown of €3,000,000 on foot of the Anglo facility, to which would be added a sum of €400,000 provided by Crohan O’Shea through his company Vividale Limited. That €3,400,000 was to be used as follows. The parties were agreed that the amount necessary to discharge the First Active loan was in the order of €3,250,000. That is the figure appearing in the partnership agreement executed by the parties on the 30th July, 2003. The balance of €150,000 was to be paid to Michael and William Butler. However, of that €150,000, almost €100,000 would be used to discharge legal fees owed by the Butlers to Messrs. Houlihans, solicitors. These details are un-controversial, and are set forth in the partnership agreement signed by the parties. The balance of the Anglo loan would be used for the purpose of completing the housing development on the Clonmel lands.

50. The discharge of fees owing to Houlihans had to be achieved before Mr Nelson could begin to act for the Butlers in relation to the Clonmel lands and therefore the partnership. But by the end of July, 2003 he had come to satisfactory arrangements with Houlihans in relation to the discharge of their fees, thus enabling the judgment mortgage on the Clonmel lands to be removed. That was necessary in order to put the Anglo security in place.

51. There is no doubt on the evidence that it was Mr Nelson who prepared the partnership agreement that was executed by the four partners on the 30th July 2003, and about which the Butlers make complaint. They have complained that Mr Nelson had a conflict of interest (being the solicitor for Messrs. O’Shea and O’Driscoll), that he favoured those parties over the Butlers, and that he negligently permitted them to enter into the agreement – an agreement which they allege did not reflect their instructions to him, and further that he negligently permitted them to enter into this agreement without ensuring that they had obtained independent legal advice.

52. The trial judge addressed the plaintiffs’ evidence in relation to these complaints at great length in her judgment. She went into considerable detail in relation to the evidence given by Michael Butler. She referred specifically to the fact that Mr Nelson had written to Michael Butler on the 22nd July 2003 notifying him of the appointment that had been made for the 29th July 2003 to complete the legalities connected to the drawdown of the Anglo loan. In that letter he raised certain questions about both the Clonmel lands and William Butler’s lands at Lewagh More. He went on to state that he was at that time drafting a partnership to be signed by the four partners. But in relation to some of the plaintiffs’ complaints about Mr Nelson it is important to recite the following passage from that letter. The trial judge referred to this letter at para. 26 of her judgment but quite briefly. The relevant passage to which I wish to refer in detail states as follows:

“My position at the moment is very precarious and I have to be careful not to enter into a ‘conflict of interest’ situation. I can only officially come on record for yourself and William next Tuesday when I am in a position to honour my undertaking to Michael Houlihan & Partners. Until then, I am, strictly speaking, not entitled to represent yourself and William Butler. To be fair to the two of you, and to protect my own interests, I am insisting that you are advised by another solicitor in relation to the agreement. Who do wish to nominate in this regard? As soon as you do I will send a copy of the draft agreement to him/her.
I will not proceed with the re-mortgage from First Active plc to Anglo Irish Bank unless the signed agreement is firstly in place. As soon as the re-mortgage has been completed I can act freely on behalf of all four of you in relation to this transaction. I hope you understand my reasons for wishing to proceed in this manner.”

53. The trial judge noted that Michael Butler accepted that he had received this letter, as did William Butler. The trial judge noted also the evidence of Michael Butler that in fact he had spoken to another solicitor about the matter, though, as noted, this was said by him to be ‘tentative advice”. It appears that Mr Butler met that solicitor on the street and had a discussion with him. But, as noted also by the trial judge, Mr Butler accepted in cross-examination that he had discussed the contents of the draft partnership agreement with this solicitor. It appears also that in fact Mr Butler had some issues with the draft and had some amendments made to it before it was signed. This is referred to by the trial judge at para. 34 of the judgment.
54. The trial judge was satisfied that there was no credible evidence that the defendant firm had any involvement in the negotiations between the parties that led to the partnership agreement which Mr Nelson drafted. The trial judge pointed to the terms of the retainer of the defendant as evidenced by an authorisation signed by both Michael and William Butler which appears to be dated 11th July, 2003 which stated as follows:-

“We hereby authorise Nelson & Co solicitors of Templeogue Village, Dublin 6W to act for us exclusively in relation to the following matters:

1. The redemption of a mortgage in favour of First Active plc affecting a 15 acre residential development site at Airmount, Cashel Road, Clonmel, County Tipperary.
2. A 52 acre farm at Lewaghmore, Thurles, County Tipperary.

3. Redemption of all loans or liabilities affecting the above two properties.

4. The drawdown of loan facilities from Anglo Irish Bank Corporate plc [sic]

5. the discharge of €40,000 to include €20,000 against judgement Dubai us to Michael Houlihan & Partners, solicitors, Ennis, Co Clare.

6. The payment of any fees due to Martin E. Marren & Co-Solicitors, in relation to the restoration of Butler Bros (Cashel) Limited.”

55. On the 10th July, 2003 both Butlers had signed an authority authorising First Active to release the title deeds held by First Active plc to Nelson & Co. on an accountable receipt. This was to enable Nelson & Co. to put in place the security required by Anglo as a condition of the loan approval referred to above.
56. It appears from the judgment of the trial judge that at one point Michael Butler asserted that Mr Nelson had been negligent by not insisting that Messrs. Houlihan solicitors were present when the Butlers signed the partnership agreement since, according to what Michael Butler stated, that firm was acting for him and his brother in relation to the partnership. However, the trial judge was satisfied that the documentary evidence pointed to the conclusion that Messrs. Houlihans had ceased acting for the Butlers from 12th July, 2003 with regard to any matter relating to the lands in Clonmel, the loan with first active or any other related matters relevant to the proceedings. She stated that “no other finding is possible on the evidence”. I entirely agree with that conclusion having examined all of the evidence given by the plaintiffs during the course of the hearing in the High Court, and having carefully considered the submissions made on this appeal.

57. I also agree with certain comments made by the trial judge in relation to the quality of some of the evidence given by Michael Butler. She found him in some respects to be “elusive”. That phrase was used for example at para. 29 of the judgment. At para. 38 she said the following:-

“Michael Butler had a remarkable and almost perfect recall of many letters that were exchanged between the parties in the course of this transaction and he had precise recall of exact and uneven figures, and was an expressive and articulate witness. He was from time to time in the course of his evidence, however, elusive and on several occasions he used the phrase “I will not affirm or deny” with regard to a matter that was put to him, and when he was pressed as to when Messrs. Houlihans ceased to act for whom and when John Nelson came to act for him he used that phrase on a number of occasions.”
58. I am satisfied that the trial judge was entitled to reach the conclusions which she reached on this aspect of the plaintiff’s evidence and to find, as she did, that there was no credible evidence adduced by the plaintiffs to support a claim in either breach of contract or in negligence on the part of the defendant arising from its involvement it with these parties either prior to or up to the execution of the partnership agreement on 30th July, 2003.
59. Even though Mr Butler asserted in his evidence that Mr Nelson’s retainer was of a general and all-embracing nature to advise the Butlers in relation to everything to do with the partnership, and that it was not confined to the re-financing transaction, the putting in place of the Anglo security, and to the sale of houses that would be constructed on the Clonmel lands, the trial judge was entitled to conclude that there was no evidence adduced to substantiate that mere assertion, and that the documentary evidence contradicted it. In this regard she concluded at para. 47 of her judgment:-

“Further, I consider that they are evidence is that the retainer of Mr Nelson was specific and related to the sale of the residential units, the redemption of the First Active loan, the putting in place of security as required by Anglo Irish Bank and the drawdown of funds. I consider that the evidence points to no other finding but that the plaintiffs were aware of the nature of the retainer. Further, the engagement of the firm to act in the sales was done after negotiations by the partners and another firm of solicitors was also in the picture as a possible alternative. Further as events show, and as will appear later in this judgement, the Butler brothers employed various different solicitors, including, Messrs Binchy, and Chris O’Shea solicitor, to act on their behalf in the course of related but different matters and disputes at the time.”
60. One only has to look at the authorisation to which I have already referred and which was signed around 11th July, 2003 by Michael Butler and William Butler to see the very specific nature of Mr Nelson’s retainer at that time, to see that the retainer was confined to these issues. There was no evidence adduced, apart from the plaintiffs’ mere assertion unsupported by anything else, which could support their claim that Mr Nelson had any wider or more general extensive retainer as alleged.
61. The trial judge was entitled also to conclude that there was no evidence of negligence in relation to the question of independent legal advice for the Butlers. The letter of 22nd July, 2003 to which I have referred, explained Mr Nelson’s position with great clarity, and makes it abundantly clear that Mr Nelson was insisting that the Butlers take independent legal advice, and he explained clearly why that was necessary. He was not dealing with persons suffering from any incapacity. He was dealing with persons he knew to be experienced businessmen. Having expressed his insistence upon them taking independent legal advice in relation to the proposed partnership agreement, for the reasons which he gave, he was entitled to assume thereafter that they would do so. As it turns out, the evidence has disclosed that Michael Butler did so. The fact that he chose to do so in the manner in which he did, namely by discussing the proposed agreement in some detail with a solicitor who he met on the street, is not something that diminishes in any way the discharge by Mr Nelson of his duty to insist upon the Butlers taking independent legal advice. The trial judge was completely correct to reject the assertion by Michael Butler that Mr Nelson was obliged to have ensured that the agreement was signed by the Butlers in the presence of a solicitor from Messrs. Houlihans, and she was entitled to conclude in any event that that particular firm had ceased to act by 12th July, 2003.

62. The trial judge was entitled to conclude, having regard to all of the evidence adduced by the plaintiffs, that taken as its height from the plaintiff’s point of view, including the documentary evidence, and without regard to anything contained in the witness statements of the defendants or even the cross-examination of the plaintiff’s, that the defendant had no case to answer in relation to allegations related to events prior to and up to 30th July, 2003.
BOSOD
63. BOSOD is a limited liability company that was incorporated on the 30th July, 2003 for the purpose of carrying out the building works for the housing development on the Clonmel lands. BOSOD would build the houses, and be paid for doing so from the Anglo borrowings, or any other funding that might be provided for the development.

64. Mr Nelson incorporated this company. He and his wife were named as the subscriber shareholders, and were named as the first directors. The name represents the surnames of the Butlers, Mr O’Shea and Mr O’Driscoll. They each signed a share transfer form so as to divest themselves of those shares in favour of the partners, and resigned as directors in favour of the four partners almost immediately thereafter as is evidenced by a letter dated 7th August, 2007 from Mr Nelson to the partnership’s accountant, Frank Hussey of LHM, Chartered Accountants in which he stated that he had sent a form B10 to the Butlers for their signature as incoming directors, and stating also that as soon as he received that form back from them he would have it signed by Mr O’Shea and Mr O’Driscoll and then file it in the Companies Registration Office. He also enclosed the share transfer forms which had been signed by himself and his wife, Susan Nelson stating that the four incoming directors were to be equal shareholders in the company “as you are aware”. As it happens, that Form B10, though signed by all the partners as incoming directors on the 11th August, 2003, was not actually received by the Companies Registration Office for filing until one year later on the 14th August, 2004. Much is made of this feature of the case by Mr Butler, particularly in support of his allegation, based only on the fact that the records in the Companies’ Registration Office continued until August, 2004 to show Mr & Mrs Nelson to be the directors, that Mr Nelson and his wife effectively ran this company for their own benefit and embezzled the company’s money, and otherwise defrauded them. These outrageous allegations persisted in the High Court and through this appeal despite the fact that by then they had copies of the form B10 that they had signed in August, 2003, and the letter from Mr Nelson to Mr Hussey that I have referred to. On this appeal, when I drew Mr Butler’s attention to the form B10 which bore his signature, so that I could be sure that he had not inadvertently overlooked its existence when suggesting wrongdoing on the part of Mr Nelson and his wife, he resorted to responding that the form had been deliberately backdated by Mr Nelson. This stance was maintained even when the letter to Mr Hussey was drawn to his attention which puts beyond doubt the fact that Mr and Mrs Hussey had resigned as directors in August 2003 and had transferred their subscriber shares.

65. The trial judge concluded that there was no evidence adduced in relation to any involvement by Mrs Nelson in the management of the company, or in any decisions made by Mr Nelson in relation to the company. That is a correct conclusion. There was no such evidence adduced. On this appeal the appellant included Mrs Nelson in the accusations which he levelled against Mr Nelson in relation to his alleged mismanagement of the affairs of BOSOD. There was no basis for him to do so.

66. As far as Mr Nelson and BOSOD is concerned, the trial judge noted that the allegation is that he:-

(a) Incorporated a company called BOSOD Ltd but failed to ensure that it “performed its proper function” in relation to the partnership;
and

(b) dispersed partnership funds and thereby left the plaintiffs short of funds to carry out the building works.

The trial judge stated at para. 56 of her judgment that “at its height” the case being made against Mr Nelson is that if he had done his job properly there would not have been any need for additional funding which necessitated a supplementary partnership agreement in August, 2004. As explained by the trial judge in her judgment, the initial loan from Anglo was never going to be enough to complete the entire development. Further funding was always going to be required. She explains also that certain title difficulties emerged of which the Butlers were aware but of which Mr Nelson had not been apprised. Those problems needed to be resolved which took time, and that led to sales of houses not being completed as speedily as would otherwise have been the case. The trial judge was completely satisfied that there was no evidence to support any claim of negligence by Mr Nelson arising from any delay in having these matters resolved. That is a conclusion which she was obliged to reach on the evidence given. There was no evidence which she overlooked in that regard. There was simply no evidence to support the allegations made.
67. The need for additional funding culminated in a supplementary partnership agreement dated 24th August, 2004. Crohan O’Shea had agreed that he would make an additional €500,000 available to assist in the completion of the development, and it appears that the bank was willing to loan a further €500,000. The additional funding by Mr O’Shea is reflected in the supplementary partnership agreement. Essentially this provided that this loan would be repaid to Mr O’Shea by the 31st January 2005 with interest, and that he was to receive “the first one million five hundred thousand euros of the nett profit arising from the development. There were other provisions that it is unnecessary to specify.

68. It is important to note from the judgment that by the 8th March, 2004 Mr Nelson had ceased to act for the Butlers. They had by that date instructed Messrs. Binchy solicitors of Clonmel. Disputes between the parties had emerged so that Mr Nelson could no longer act for all four partners. He continued to act for Mr O’Shea and Mr O’Driscoll, and for the partnership but, as stated by the trial judge “only and in so far as that entity had separate interests from those of the individual partners”.

69. One of the allegations made by the Butlers is that if Mr Nelson had prepared the partnership properly, or “had done his job properly” there would not have been any need for the second agreement which arose because additional funds were needed. It is very unclear what the basis for that allegation is. The trial judge found it to be completely unfounded on the evidence, and that no evidence had been adduced to support it. I can find none either. There seems to have been a suggestion by the Butlers that the delays in the completion of the sales led to the cash-flow problems. But as I have already stated, the clear evidence was that this delay arose because of specific title problems which Mr Nelson encountered and of which he had not been made aware in advance, even though Michael Butler was aware that they existed. These difficulties were not in fact resolved until September, 2004.

70. The trial judge also concluded, as she had to in my view on the evidence before her, that no evidence had been adduced by the plaintiffs that the partnership agreement as drafted, which they signed and in respect of which Michael Butler received independent advice, did not in its final form accord with their instructions or did not meet their needs, and certainly not in any way that could give rise to any claim for losses arising. In this respect she stated at para. 59 of her judgment:

“The plaintiffs have not produced any evidence that this is so. They did not for example adduce evidence that the partnership agreement ought to have contained a provision to deal with the obvious need that the development would have for further finance beyond the initial tranche that was to be drawn down from Anglo Irish Bank, and which on any reading of the figures was sufficient to deal only with the First Active charge (which reflected the cost of the land itself) and the building out of the first 15 units. In that context it cannot be ignored by me that the partnership provided that the four partners would be equal partners, but that it would be fair for the purposes of the exercise now engaged to assume that, by the partners are equal, there were two of “camps”, or sets of interest, which were to be protected by the partnership agreement, the interest of the Butlers as landowners on the one hand, and the interest of the other two partners as the persons who provided the capital or the link or introduction to the bank that itself provided the capital. The height of the borrowings at the time the partnership agreement was entered into was the sum of €5.4 million to be drawn down from Anglo Irish Bank, and the evidence points to this being at best funding first 15 houses. I accept that the plaintiffs have adduced evidence that the intention was to build the 111 residential units in respect of which planning existed, and their own evidence would suggest, and no contrary evidence has been adduced before me, that in multiple of €5.4 million would be required to build out the balance of the units.”
71. The trial judge was clearly entitled to conclude that there was no evidence that the instructions which Mr Nelson received for the purposes of preparing the partnership agreement were not fully included in that document. Mr Butler made some complaints about a few matters included in the agreement which he said he had not agreed. For example, he was not happy that Mr O’Shea was given a casting vote at meetings of the partnership in the event of a tied vote. But, as the trial judge concluded, no possible loss could arise on foot of that complaint because Mr O’Shea had never exercised a casting vote in respect of any decision. Similarly, Michael Butler was unhappy with clause 17 which provided for the appointment of an arbitrator in respect of any dispute or difference which might arise and which might not be capable of agreement. But again, no such arbitrator was ever appointed, and no possible liability could therefore arise. He was also unhappy about the reference in clause 1 to William Butler’s lands at Lewage More. But again that is a mere reference. There was no transfer of those lands into the partnership for any question of that. It is simply a fact that those lands are mentioned and it is also a fact that those lands formed part of the security that were being provided to Anglo Irish Bank. Again, there is no question of any loss arising, even if Michael Butler is correct that such a recital should not have been contained within the document. If the argument is that there was never any agreement that William Butler’s lands would be part of the security for the Anglo loan, there is no getting away from the fact, as mentioned by the trial judge also, that Mr Nelson was not part of any negotiations with Anglo, and further, the facility letter which was signed by all the borrowers, including William Butler, made a specific reference to those lands as being part of the security requirement. The trial judge was entitled to conclude that there was no evidence to indicate any fault on the part of Mr Nelson in that regard. That is clearly a correct finding. Further, in any event, as noted by the trial judge at paragraph 62 of her judgment, in due course Anglo in fact agreed to release that particular security after the facility had been sufficiently paid down.
72. In paragraph 63 of her judgement onwards, the trial judge deals with a number of headings under which the plaintiff’s seek to attach liability to the defendant. These are the disbursement of sale proceeds, money advanced by siblings, conclusion on the contractual role of Mr Nelson, conflict of interest, whether Mr Nelson had a general retainer. In respect of each such heading of complaint the trial judge concluded, after an exhaustive consideration of the evidence given by the plaintiffs, and taking it at its height, that there was no evidence to support even stated will case of negligence or breach of contract or breach of fiduciary duty against the defendant firm. She concluded her judgement from para. 77 by stating her conclusions by reference to the heads of claim as set out in the lettered paragraphs which I have set out in para. 39 above. By reference to those paragraphs she stated the following conclusions:-

“(a) I have dealt in detail with this part of the claim and consider that the evidence point overwhelmingly to the fact that the defendant advised the plaintiff’s to take separate advice and that they did so take advice from Mr Scott.
(b) I have dealt with this head of claim and consider that the evidence does not point to any preference by the defendant of the interest of one partner over that of others. The disbursement of funds was made in accordance with the partnership agreements.

(c) No evidence was heard by me in regards to any alleged failure of the defendant to deal properly with the company BOSOD.

(d) The evidence overwhelmingly points to the fact that the partnership did obtain additional finance, and indeed most of the units from which planning permission was granted were in fact built. The claim by the builders is not before me, but even accepting that the plaintiffs did act as builders they have not adduced evidence of any agreement with the partnership for the disbursement of the proceeds of sale. Furthermore the defendant firm did not act for the plaintiffs in their capacity as builders, and another firm of solicitors acted.

(e) This head of claim is dealt with at paragraph 63 [of the judgment of the trial judge].

(f) The evidence of Mr Michael Butler is that he and his brother knew of the prior professional involvement that the defendant firm had with Crohan O’Shea. No negligence arises as a result. Furthermore, no loss was shown as having arisen as a result of any alleged lack of independence. The claim as made is that Mr O’Shea was preferred in the making of certain payments at a time when another firm of solicitors was acting for the plaintiffs.

(g) The trust between the parties broke down early in the course of the partnership. The Butler brothers as a result had separate legal and ferment shall advice from March 2004 at the latest. No loss is shown to arguably have arisen as a result of the action or inaction of the defendant. I consider that no evidence has been adduced that Mr Nelson caused the loss of trust between the business partners.

(h) No evidence was adduced as to the “chaotic” disbursement of funds, and no loss was shown as arguably arising therefrom.”

73. The trial judge went on to state that her conclusions in relation to the claim in negligence had already been fully dealt with earlier in her judgement, as was her conclusion in relation to the claim for breach of fiduciary duty. In respect of each of these heads of claim, the trial judge was satisfied that no credible evidence had been adduced by the plaintiffs to support them.
74. In my view these were conclusions that the trial judge was entitled to reach on the evidence before her which was deemed by her to be admissible. By stating my conclusion in that manner, I am referring to the fact to which reference has already been made by me that on the appeal before this Court much of the focus of Michael Butler’s submissions was upon the fact that in the High Court the plaintiffs were not permitted to call Ms Angela Farrell as a witness in relation to her knowledge of the Anglo Irish bank statements which she had obtained, and the fact that the trial judge had allowed Mr Charles Russell, accountant, to give only limited evidence by way of comment upon the spreadsheet which had been put to Mr Butler in cross-examination, and he was not permitted to give any evidence derived from his inspection of the Anglo bank statements.

75. I have already explained the reason why Ms Farrell was not permitted to give evidence. She was not permitted to give evidence because she had not provided a witness statement as directed during case management, and also because the trial judge was not satisfied that Ms Farrell had the necessary expertise to comment upon the financial transactions evident from the bank statements, and that any expertise that she had would have been in relation to conveyancing, she having been a solicitor, but that no complaint was made by the plaintiff’s in relation to any conveyancing work carried out by the defendant firm.

76. In my view the trial judge was correct to refuse to permit Ms Farrell to be called as a witness in these circumstances. The bank statements in question had not been discovered by the plaintiffs. The plaintiffs had been ordered to make discovery of documents referred to as category 4 in the order dated 13th of January, 2014. Category 4 was in the following terms:-

“All documents relating to the alleged frustration by the defendant of the use of the partnership funds leading to the necessity to source of funds with the plaintiffs’ siblings (as alleged at paragraph 23 (iv) of the plaintiff’s replies to particulars dated 18th September, 2013) to include any documents or records held at any time by the plaintiffs or their companies relating to the proceeds of sale of the development at [Clonmel lands] and all documents relied upon by the plaintiffs as evidencing any alleged failure by the defendant to adequately account for the application of partnership funds which led to the necessity for such sourcing of funds.”
77. It is clear beyond any doubt in my view that the trial judge was correct in concluding that the Anglo Irish bank statements relating to the loan facilities for this development were within Category 4. The fact that these documents were not discovered as ordered lies fairly and squarely with the plaintiffs themselves. If those documents had been discovered, there is it least the possibility that despite any apparent lack of financial expertise, Ms Farrell may have been permitted to comment upon them. But the fact that they were not discovered as directed had the inevitable result that the bank statements could not be adduced in evidence and relied upon to support the claims of financial mismanagement, negligence, breach of contract being alleged against the defendant firm.
78. These comments are equally applicable to the complaint made by Mr Butler on this appeal that Mr Russell was not permitted to give evidence on foot of his inspection of the same bank statements. Mr Russell’s evidence as far as it went did not constitute even prima facie evidence of negligence, breach of contract or breach of fiduciary duty, or even of any losses arising to the plaintiffs. Mr Russell candidly admitted that the information and documents provided to him and which he had an opportunity to consider were insufficient to reach any definite conclusion in that regard.

79. I have carefully read the transcript for 19th March, 2015 which was the day on which it was sought to call Mr Russell. There was an exchange between counsel for William Butler and the trial judge about whether or not he could be called. It transpired that he had with the leave of the court prepared a witness statement on the 6th March. 2015. The trial judge had read it. She did not think that his evidence would assist her greatly but she stated that she would allow him to give evidence in relation to the spreadsheet already referred to, but she would not permit him to make comments upon what was not contained in the spreadsheet.

80. Mr Russell stated that he had carried out an analysis of what returned and paid client account cheques of Mr Nelson he had been provided with in respect of payments to Anglo. But he acknowledged that these cheques did not cover all the amounts that had been paid out of that account, and also that it was not always clear who exactly the payee was in respect of some of the cheques. Some were to Anglo itself and others were to other accounts within Anglo, for example “Anglo – Crohan O’Shea”. He was unable to say what every cheque paid into Anglo was in respect of. That was as far as his evidence could go, he said. But then at Q. 948 in answer to the trial judge he went on to state:

“ … looking at the Anglo statements, which was the other thing I did, Anglo statements showed the total repayments on the three loans and those total repayments came to €12,299,000.”
81. It was at this point that the issue arose that these bank statements had not been discovered as ordered. Mr Russell stated that he had seen them at the offices of Ms. Farrell where he was presented with full statements on three Anglo loan accounts “from inception to completion”. He had not been aware that there was an order for the discovery which included these bank statements. The trial judge concluded that in these circumstances that he could not give evidence by reference to his inspection of these statements. There followed some discussion with counsel. The trial judge stated that she would rise for five minutes so that counsel could take instructions from Mr Butler and advise him as to the consequences of the failure to discover these documents. After a short adjournment, according to the transcript, the hearing resumed, whereupon counsel stated that his clients view was that the order for discovery that had been made did not cover those bank statements. There was a good deal of discussion about that, but the trial judge ruled on the matter to the effect that the statements were within Category 4 in the order for discovery made on the 13th January, 2014, and accordingly that Mr Russell could give no further evidence.
82. In my view this ruling by the trial judge was absolutely correct. The bank statements of the Anglo loan accounts were within Category 4. There can be no doubt about that. They should have been discovered, and were not. That failure has consequences, one of which is that at trial evidence cannot be led which is related to or reliant upon what is in those statements. In my view it is extraordinary, and indeed unexplained in any rational way, why they did not discover the bank statements which, if the plaintiffs are correct in their allegations, would surely show in black and white the deficits in the accounting for the monies of the partnership which are alleged to have been perpetrated by the defendant, or certainly assisted greatly in that endeavour. The plaintiffs have only themselves to blame for the problem that arise with Mr Russell giving evidence by reference to them.

83. I should refer again to the spreadsheet which was produced to Mr Butler during his cross-examination for his comments. Mr Butler has submitted this Court that once that spreadsheet was produced in cross-examination it was not permissible for the defendant thereafter to bring an application for non-suit. But in my view it cannot be the case that a defendant who considers that he or she may wish to bring an application for non-suit at the conclusion of the plaintiff’s case may not conduct as thorough and complete cross-examination of the plaintiff’s witnesses as he/she would if no such application was being contemplated. The fact that a document is produced to the plaintiff in cross-examination, which the defendant in due course would have to prove and in turn be cross-examined on, does not mean that the defendant is obliged to be called to give evidence, thereby ruling out a non-suit application at the conclusion of the plaintiff’s evidence.

84. On this appeal the Court made valiant and frequent efforts to try and intervene with Mr Butler in order to try and help him to focus on matters that were in the Court’s view the relevant issues. These efforts were to no avail whatsoever. Whether or not that is because of Ms. Farrell’s guidance and constant advice to Mr Butler does not really matter. The fact is that most of the hearing on this appeal was spent by Mr Butler essentially trying to re-run the case he had been trying to make in the High Court, rather than by focussing his arguments on submissions as to why in his view the trial judge erred in her conclusions in relation to the plaintiffs’ lack of evidence, and in granting the non-suit application. The Court did its best in this regard. But it was in truth impossible to divert Mr Butler from the course on which he seemed to have set his compass so firmly. His submissions did not address in any meaningful way the evidence in the High Court, or perhaps more appropriately, the lack of evidence which resulted in the trial judge concluding that despite the fact that evidence had ranged over some eight days of hearing there was no prima facie case made about against the defendant.

85. For all the reasons stated I am satisfied that the appeals by Michael Butler should be dismissed. I am also satisfied from what Michael Butler informed the Court that William Butler was kept fully informed by him as to the progress of this appeal through the directions stages, and that he was made aware of the date fixed for the hearing, and has therefore chosen not to attend to prosecute his appeal. It is safe to assume in any event that the submissions made by Michael Butler apply equally to William Butler’s appeal, and that his appeal must also be dismissed. In my view it is appropriate to dismiss his appeal on the merits also, rather than simply on the default basis that he failed to appear to prosecute it.

 

Tougher v Tougher’s Oil Distributors Ltd

[2014] IEHC 254

JUDGMENT of Mr. Justice Cregan delivered on the 15th day of May, 2014
Introduction
1. This is an application by the plaintiff, Mr. Tougher, to permit Mr. Vincent T. O’Donoghue, a former solicitor, to represent Mr. Tougher in court in an application by the first named defendant to strike out his proceedings and to vacate a lis pendens registered over property in the name of the first named defendant. The application was not simply that Mr. O’Donoghue would be permitted to act as a “McKenzie friend” but that Mr. O’Donoghue could have full rights of representation.

2. For the limited purpose of considering the application for a right of audience, I gave liberty to Mr. O’Donoghue to address the court on this issue. Mr. Tougher also made brief submissions on this point.

3. In response to a specific question from the court Mr. O’Donoghue confirmed that he was seeking an unrestricted right of audience before the court to represent Mr. Tougher in this matter.

4. Mr. O’Donoghue in his submission argued that Mr. Tougher had a right to a fair hearing; that Mr.Tougher had a right to appoint Mr. O’Donoghue to act on his behalf; and that Mr. O’Donoghue, on Mr. Tougher’s behalf, had an untrammelled right of audience before the court. Mr. O’Donoghue also referred to a “Directive from Europe” (which he did not particularise any further, but which he indicated had not yet been ratified) which he sought to rely on. He also sought to rely on unparticularised provisions of the European Convention of Human Rights and also what he termed developing principles of natural justice and a right to a fair hearing.

5. The defendants submitted that they had no objection to Mr. O’Donoghue appearing as a McKenzie friend for Mr. Tougher, but they did object to him seeking a right of audience before the court.
Applicable Legal Principles
6. In Coffey & Ors, a decision of the Supreme Court of 26th February, 2013, the Supreme Court set out the appropriate legal principles to be applied in an application of this nature.

7. At para. 16 of his judgment Fennelly J. states as follows:-

“16. These paragraphs encapsulate the nature of the application being made by Mr. Podger on behalf of the appellants. The court is not confronted in this case with a litigant in person. Such litigants have become an increasingly common feature of litigation in our courts. The reasons are many and various. There can be no doubt that a major contributory factor has been that the difficult economic circumstances prevailing in recent years have made it difficult or impossible for many people to pay for their own legal representation. In these circumstances the courts of necessity are obliged to allow parties to present their own cases and, though it may be difficult for them, legal arguments. The courts have recognised the capacity of a McKenzie friend to assist a lay litigant usually by giving advice or organising papers. That procedure, however, must of necessity be carefully supervised. Only in the most limited circumstances will a court permit a McKenzie friend to address it. In the family courts in particular it is necessary to ensure that the admission of a McKenzie friend does not undermine the confidentiality of proceedings being heard in camera. Furthermore, any application in this regard must be made bona fide and must relate solely to the activities which, if admitted, such a friend may perform.
17. The notion of a McKenzie friend originates in the decision of the Court of Appeal in England in McKenzie v. McKenzie [1970] 1 P. 33. Davies L.J. recalled the following statement of Lord Tenterden C.J. in Collier v. Hicks [1831] 2 B & AD 663:

‘Any person, whether he be a professional man or not, may attend as a friend of either party, may take notes, may quietly make suggestions, and give advice; but no one can demand to take part in the proceedings as an advocate, contrary to the regulations of the court as settled by the discretion of the justices.’

18. That brief statement continues to represent an accurate description of the role of a McKenzie friend and is generally accepted by our courts. It was considered in the High Court by Macken J. in R.D. v McGuiness [1999] 2 IR 411, which were family-law proceedings. She concluded, at page 421, that “a party who prosecutes proceedings in person is entitled to be accompanied in court by a friend who may take notes on his behalf and quietly make suggestions and assist him generally during the hearing, but……may not act as advocate”. …It will be noted, of course, that this is a description of the role of the McKenzie friend. This is not to say that a judge may not, on occasion, as a matter of pure practicality and convenience, invite the McKenzie friend to explain some point of fact or law, where the party is unable to do so or do so clearly. That must always be a matter solely for the discretion of the judge. The McKenzie friend has no right to address the court unless invited to do so by the presiding judge.
19. Here the court is asked to permit something utterly different.

21. Mr. Podger is neither counsel nor a solicitor, nor does he wish to act in the capacity of a McKenzie friend. He seeks an unrestricted right of audience before the courts. As I understand it, he wishes to be permitted to present the appeal on behalf of all of the appellants to the same extent as if he were a professionally qualified counsel or solicitor. He rejects the suggestion that he could act as a McKenzie friend. He is unwilling to accept the limited nature of that role. He considers it unduly restrictive that he should be limited to assisting the appellants without enjoying a right of audience. He seeks an unlimited right to appear and to argue the appeals but without any of the limitations which would apply either to a McKenzie friend or to a properly qualified legal practitioner. He submits that, in the absence of any provision of EU law prohibiting such a lay advocate as himself, that he is entitled to an unrestricted right of audience before the courts and that to deny him such a right of audience is to infringe the rights of the appellants to access justice in general, and specifically to access justice under the Aarhus Convention.

22. I am satisfied that the application of the appellants to be allowed to be represented by Mr. Podger and by him that he should be allowed to represent them must be rejected.

23. The fundamental rule is that the only persons who enjoy a right of audience before our courts are the parties themselves, when not legally represented, a solicitor duly and properly instructed by a party and counsel duly instructed by a solicitor to appear for a party…”

25. Thus, the right of audience is regulated by law. It is true that a party to proceedings (other than a corporation) has the right to appear for him or herself and to plead his or her own case. This is a matter of necessity as well as right. Regrettably it is a fact of life especially during the current economic difficulties in our country that many people are unable to afford the often high cost of professional representation and that the availability of legal aid is limited. There are other cases where litigants disagree with their lawyers or are unwilling to accept representation. Whatever the reason, there is an inevitable number of cases before the courts where litigants are unrepresented. In those cases, they have the right to represent themselves. It has to be accepted that this is sometimes unavoidable, which is not to say that it is desirable. There is no doubt that courts are better able to administer justice fairly and efficiently when parties are represented.”

And at para. 29 Fennelly J. stated:-
“29. It would be inimical to the integrity of the justice system to open to unqualified persons the same rights of audience and representation as are conferred by the law on duly qualified barristers and solicitors. Every member of each of those professions undergoes an extended and rigorous period of legal and professional training and sits demanding examinations in the law and legal practice and procedure, including ethical standards. Barristers and solicitors are respectively subject in their practice to, and bound by, extensive and detailed codes of professional conduct. Each profession has established a complete and active system of profession discipline. Members of the professions are liable to potentially severe penalties if they transgress.
30. There would be little point in subjecting the professions to such rules and requirements if, at the same time, completely unqualified persons had complete, parallel rights of audience in the courts. That would defeat the purpose of such controls and would tend to undermine the administration of justice and the elaborate system of controls.

31. I wish to make it clear that there is no reason at all to suspect the integrity of Mr. Podger, his commitment to the cases he wishes to bring on behalf of the appellants or his knowledge of this particular area of environmental law. However, the fact remains that he is not qualified in law and does not have any right of audience.

37. In conclusion, the general rule is clear. Only a qualified barrister or solicitor has the right, if duly instructed, to represent a litigant before the courts. The courts have, on rare occasions, permitted exceptions to the strict application of that rule, where it would work particular injustice. The present case comes nowhere near justifying considering the making of an exception. Mr. Podger seeks nothing less than the general right to appear on behalf of a group of thirteen litigants and to plead their cases to precisely the same extent as if he were a solicitor or counsel, which he accepts that he is not, but without being subject to any of the limitations which would apply to professional persons.”

8. In the same way here I wish to make it clear that there is no reason at all to doubt the integrity of Mr. O’Donoghue. Moreover, it is clear that Mr. O’Donoghue is a former solicitor, but he is not a solicitor currently in practice and, therefore, is not a solicitor who is subject to, and bound by, the extensive and detailed codes of professional conduct of the Law Society.
9. Moreover, although the courts have on rare occasions permitted exceptions to the strict application of that rule where it would work particular injustice, I am of the view that, just as in the Coffey case, the present case comes nowhere near justifying the making of such an exception. I am clearly bound by the Supreme Court decision in Coffey which, in my view, applies in this case.

10. Furthermore, Mr. O’Donoghue has sought to make very general and unparticularised submissions based on the European Convention on Human Rights and general principles of natural and constitutional justice and a vague reference to some unnamed and apparently unimplemented EU Directive. However, this matter was also addressed by the Supreme Court in the Coffey decision as follows:-

“39. Finally, Mr. Podger purports to demand that the Court provide some reference to a provision of EU law excluding him from representing the appellants. That would be to reverse the proper nature of the inquiry, which is whether there is any provision of EU law precluding the Court from applying the fundamental tenets of its legal system adopted in the interests of the protection of the integrity of the administration of justice. In fact, Article 19 of the Statute of the Court of Justice regulates the representation of parties in proceedings before the Court of Justice of the European Union. Member States and the Institutions of the Union must “be represented before the Court of Justice by an agent appointed for each case…” The agent “may be assisted by an adviser or by a lawyer.” Most materially, the Article then provides:

“Other parties must be represented by a lawyer.
Only a lawyer authorised to practise before a court of a Member State or of another State which is a party to the Agreement on the European Economic Area may represent or assist a party before the Court.”

…

It is clear, therefore, that there is no warrant for the claim that, in the application of EU law or the European Convention on Human Rights, specifically either by the Court of Justice or the European Court of Human Rights, there is any obligation on the court of a Member State to permit a litigant to be represented by a person other than a duly qualified lawyer.”
11. Thus, in the present case, applying the principles as set out by the Supreme Court in Coffey, I hold that Mr. Tougher’s application (and Mr. O’Donghue’s application) that Mr. O’Donoghue should have an unrestricted right of audience to represent Mr. Tougher must be rejected.