Limitations Issues

Cases

Manning v Benson and Hedges Ltd

[2005] 1 I.L.R.M. 190
JUDGMENT OF Ms. Justice Finlay Geoghegan delivered on the 30th day of July, 2004.

PRELIMINARY

This judgment is given in relation to three applications brought by the defendants in each of the above proceedings against the plaintiff named. The applications were heard simultaneously. Each of defendants was separately represented. The plaintiffs were jointly represented. In certain of the proceedings there are additional plaintiffs and these judgments only apply to the applications against the plaintiffs named.

Plaintiffs’ claims

The primary claim of each plaintiff is a claim for damages for injury allegedly suffered by reason of alleged negligence and breach of duty of the relevant defendant. In two cases the injury alleged is emphysema and in one lung cancer. Each of the claims are similarly pleaded. Each essentially alleges that by reason of alleged wrongful acts of the relevant defendant the plaintiff commenced smoking; became addicted; continued to smoke and by reason of smoking has contracted the relevant disease or illness. Ms. Manning is alleged to have commenced smoking in 1948 and to have been diagnosed with emphysema in 1995. Ms. Garland is stated to have commenced smoking in 1942 or 1945 and to have been diagnosed with emphysema in August 1997. Ms. McNevin is alleged to have commenced smoking in 1968 and to have been diagnosed with lung cancer in November 1995.

Assumption for these applications

Defences have not been delivered in any of the claims. The Statute of Limitations has not been raised against the plaintiffs. These applications must be considered upon the basis that the claims as made are not statute barred. In each case the plenary summons was issued within three years of the date of diagnosis as pleaded. It is appropriate that the court should consider each application in the most favourable way to the plaintiff. Accordingly, it is assumed for the purposes of this application that each of the claims made is not statute barred. This appears to require an assumption that the date of diagnosis in respect of each of the plaintiffs is either the date of completion of the tort or torts alleged or the date of knowledge within the meaning of the Statute of Limitations (Amendment) Act, 1991. For reasons which should be apparent later in this judgment the former is probably the more favourable position to the plaintiffs and therefore I have assumed for the purposes of these applications that the tort or torts alleged only became complete and the plaintiffs’ respective causes of action against the defendants accrued on the date of diagnosis pleaded. In making this assumption I am not making any finding to that effect.

Defendants’ applications

Each defendant seeks an order pursuant to the inherent jurisdiction of the court that the plaintiff’s claim be dismissed. Whilst the three notices of motion grounding these applications set out in varying terms the grounds upon which the application is brought the grounds pursued by all the defendants may be summarised as follows:-

(1) That the plaintiffs’ claims be dismissed for want of prosecution on the grounds of inordinate and inexcusable delay on the part of the plaintiffs in the commencement and prosecution of the proceedings which delay has prejudiced the defendants such that the balance of justice requires that the claims be dismissed.
(2) That the plaintiffs’ claims be dismissed in the interests of justice in defence of the defendants’ rights under the Constitution including the right to fair procedures and a fair trial.
(3) That the plaintiffs’ claims be dismissed as it would be contrary to the defendants’ rights to a trial within a reasonable time under Article 6 of the European Convention for the Protection of Fundamental Freedoms and Human Rights (“ECHR”) to require the defendants to defend themselves against the plaintiffs’ claims.
Insofar as is necessary I propose considering the applicable law in relation to each of the above grounds.

Applicable Law

Want of Prosecution

The law applicable to the claim to dismiss on grounds of want of prosecution is as stated by the Supreme Court in Primor Plc. v. Stokes Kennedy Crowley and Ors. [1996] 2 I.R. 459. As there was some dispute in submissions between the parties as to precisely what was determined by that case and its application to the facts of the present applications it is necessary to set out the principles as determined by the Supreme Court in that case. The judgment of the majority was given by Hamilton C.J. and in his judgment at p. 475 set out the following applicable principles:-

(a) the courts have an inherent jurisdiction to control their own procedure and to dismiss a claim when the interests of justice require them to do so;
(b) it must, in the first instance, be established by the party seeking a dismissal of proceedings for want of prosecution on the ground of delay in the prosecution thereof, that the delay was inordinate and inexcusable;
(c) even where the delay has been both inordinate and inexcusable the court must exercise a judgment on whether, in its discretion, on the facts the balance of justice is in favour of or against the proceeding of the case;
(d) in considering this latter obligation the court is entitled to take into consideration and have regard to:-
(i) the implied constitutional principles of basic fairness of procedures,
(ii) whether the delay and consequent prejudice in the special facts of the case are such as to make it unfair to the defendant to allow the action to proceed and to make it just to strike out the plaintiff’s action,
(iii) any delay on the part of the defendant – because litigation is a two party operation, the conduct of both parties should be looked at,
(iv) whether any delay or conduct of the defendant amounts to acquiescence on part the defendant in the plaintiff’s delay,
(v) the fact that conduct by the defendant which induces the plaintiff to incur further expense in pursuing the action does not, in law, constitute an absolute bar preventing the defendant from obtaining a striking out order but is a relevant factor to be taken into account by the judge in exercising his discretion whether or not to strike out the claim, the weight to be attached to such conduct depending upon all the circumstances of the particular case,
(vi) whether the delay gives rise to a substantial risk that it is not possible to have a fair trial or is likely to cause or have caused serious prejudice to the defendant,
(vii) the fact that the prejudice to the defendant referred to in (vi) may arise in many ways and be other than that merely caused by the delay, including damage to a defendant’s reputation and business.
In relation to the application of the above principles to the defendants’ applications for an order dismissing the plaintiffs’ claims for want of prosecution there appear to be only two issues in dispute between the parties:-

(1) Should the court consider any delay by the plaintiff in the period between the date of the alleged wrongful acts or accrual of the cause of action and date of commencement of the proceedings; and
(2) In considering the balance of justice issues what period of delay is relevant to the issue of prejudice to the defendant or risk that it is not possible to have a fair trial.
On the first issue counsel for the plaintiffs submitted that the court should only look at delay after the commencement of the proceedings. It was accepted that where there has been a delay subsequent to the accrual of the cause of action but before commencement of proceedings that in accordance with the decision in Primor Plc. v. Stokes Kennedy Crowley the court will look more critically at any delay after issue of the proceedings. However, it was submitted that in considering an application to dismiss for “want of prosecution” it was only any delay in the prosecution of the proceedings i.e. after issue that should be considered.

In Primor Plc. v. Stokes Kennedy Crowley, Hamilton C.J. (in relation to the appeal by Freaneys) considered the period between the accrual of the cause of action and the issue of the plenary the summons and concluded at p. 489:

“I am not satisfied that there was inordinate delay by plaintiffs in the issue of the plenary summons on the 21st December, 1984, but having regard to the fact that the alleged acts of negligence on the part of Freaneys relate back to acts alleged to have occurred in 1978, nearly six years earlier, there was a duty on the part of the plaintiff to proceed with reasonable expedition.
In the circumstances, the delay in the service of the plenary summons and statement of claim was inordinate and inexcusable and I would dismiss the plaintiff’s appeal on this ground.”
The case O’Domhnaill v. Merrick [1984] I.R. 151 was also an application to strike out for want of prosecution. The plaintiff’s claim was for personal injuries. The plaintiff at the date of the accrual of the cause of action had been an infant. The plenary summons was issued 16 years after the accident but within the limitation period following the decision in O’Brien v. Keogh [1972] I.R. 144.

On the facts of that case, Henchy J. (who delivered the majority judgment of the Supreme Court in relation to the question of delay) concluded at p. 156:

“The recital I have given in the course taken by the plaintiff’s claim for damages, from the happening of the accident in 1961 up to the hearing of this appeal in May, 1984, gives a picture of considerable delay on the plaintiff’s side of the case. Making all due allowances, I find that delay inordinate and inexcusable.”
In each of the above cases, the Court considered the period between the accrual of cause of action and issue of the plenary summons.

Accordingly, it appears to me that the Supreme Court has determined that in considering an application to dismiss for want of prosecution, the court should, in general, consider the period starting with the accrual of the cause of action for the purpose of determining whether there has been a delay by the plaintiff. I say “in general” as neither of the above cases concerned a personal injuries claim with a “date of knowledge” within the meaning of s. 3 of the Statute of Limitations (Amendment) Act, 2000 which was later than the date of accrual of the cause of action. In such a case it may be that court should only consider the period from the date of knowledge.

The second issue relates to the period during which the court should consider whether or not prejudice has been caused to the defendants or during which they have been put at risk of an unfair trial. Counsel on behalf of the plaintiffs submitted that the court should only consider the period of delay found to be inordinate and inexcusable. It is of particular relevance to the facts of these cases by reason of the lapse of time between the dates of the first alleged wrongful acts and the dates of diagnosis being the assumed dates of accrual of the causes of action for the purposes of these applications.

Counsel for the defendants submit that when the court comes to consider the balance of justice even following a finding of inordinate and inexcusable delay that the court must consider the entire period between the dates of the alleged wrongful acts and the probable date of trial and consider whether, by reason of such periods, prejudice has been caused to the defendants for a substantial risk that it is not possible to have a fair trial.

I cannot accept this submission where the application to dismiss is grounded upon an alleged want of prosecution.

In considering the decisions of the Supreme Court in Primor Plc. v. Stokes Kennedy Crowley and the other decisions referred to therein, I am satisfied that the submission of counsel for the plaintiffs is well founded. Where the application to dismiss is based upon a want of prosecution on grounds of inordinate and inexcusable delay it appears that it inexorably follows that the court must consider whether the delay so found by it has caused serious prejudice to the defendant or gives rise to a substantial risk that it is not possible to have a fair trial. This is the approach taken by Hamilton C.J. in Primor Plc v Stokes Kennedy Crowley at par. (d)(vi) of the principles cited above. It was also the approach applied by Hamilton C.J. to the facts of those appeals. In relation to the Stokes Kennedy Crowley appeal he concluded at p. 494:

“I am satisfied, from a consideration of all the authorities, that the prejudice caused to a defendant by inordinate and inexcusable delay on

the part of the plaintiff is a fundamental ingredient which may and should be taken into account on an application to dismiss proceedings for want of prosecution and that if the prejudice is such that a fair trial between the parties cannot now be held, then the proceedings should be dismissed and the defendant should not be further prejudiced by the delay that would inevitably be caused by a long and difficult hearing of the action and the possibility of an appeal from the decision of the High Court therein.”
In none of the cases, dealing with applications to dismiss for want of prosecution, was there a significant lapse of time between the alleged wrongful acts and the alleged accrual of the cause of action. I accept that the courts have not specifically addressed the issue in the factual context in which I am now asked to do so. However it appears to me that it is consistent with the above principles and also logical that where the application to dismiss is for “want of prosecution” that the court cannot in considering the prejudice caused by delay take into account any period prior to the accrual of the cause of action. Until the cause of action accrues the plaintiff, normally, cannot commence proceedings. Hence even if as I have concluded the obligation to prosecute includes the obligation to commence proceedings there cannot be any question of delay until the entitlement to commence i.e. the accrual of cause of action occurs.

Another way of looking at the issue is to consider what would have been the position if subsequent to the date of diagnosis of each of the plaintiffs they had proceeded with alacrity to commence proceedings and prosecuted the proceedings within the time limits in the Rules. If that had been done the defendants could not have applied for an order to dismiss for want of prosecution notwithstanding the long lapse of time between the first occurrence of the alleged wrongful acts and the date of accrual of the cause of action.

It follows from this conclusion that in considering the application to dismiss for want of prosecution the court should not consider prejudice caused to the defendants or the risk that it is not possible to have a fair trial by reason of lapse of time between the alleged wrongful acts and accrual of cause of action. The fact that there was such a lapse of time may however be relevant when considering the relevant factors to the balance of justice issues. The Courts should not ignore the fact that the alleged wrongful acts took place a long time ago. At minimum where there is a long lapse of time between wrongful acts and accrual of a cause of action it may mean that the claim is already difficult for the defendant to deal with and prejudice caused by subsequent delay may have to be more critically examined. Also, such a long lapse of time places an special onus on a plaintiff to proceed with due expedition after the accrual of the cause of action.

Dismiss in the interests of Justice

The second and separate ground upon which the defendants seek an order dismissing each of the plaintiff’s claims at this stage is that it would be in breach of the defendant’s rights under the Constitution, including the right to a fair trial and to fair procedures to permit the claims to proceed.

Counsel for the defendants submit that it is now well recognised that the Courts have an inherent jurisdiction to dismiss a claim where by reason of a lapse of time between the alleged wrongful acts and the probable date of trial either a fair trial cannot be conducted by the court or it would be in breach of a defendant’s rights to fair procedures to require him to defend the claim.

In considering this submission I use the phrase “lapse of time” to indicate a period during which the court either assumes or holds that there has been no delay, in the sense of culpable delay, by or on behalf of the plaintiff. Insofar as I use the word “delay” I do so to describe a period during which the plaintiff could have taken steps to commence or prosecute proceedings (i.e. a period after the accrual of the cause of action) but did not do so.

Counsel for the defendants submit that the inherent jurisdiction contended for derives principally from Article 34 of the Constitution. Article 34.1 provides:

“Justice shall be administered in courts established by law by judges appointed in the manner provided by this Constitution …”
Reliance is also placed on the nature of the administration of justice which it was submitted may be derived from Article 34.3.1 of the Constitution which provides for a High Court which is to be “invested with full original jurisdiction in and power to determine all matters and questions whether of law or fact, civil or criminal”. The constitutional guarantee of fair procedures derived from Article 40.3 was also relied upon.

I accept that the courts have recognised the existence of a jurisdiction to dismiss a claim by reason of a lapse of time without there being any delay in the sense of culpable delay by a plaintiff and where the requirements of what are variously described as “the interest of justice” or the prevention of “patent unfairness” or the requirements of “Constitutional principles of fairness of procedure” or the risk of putting “justice to the hazard” so require.

Toal v Duignan & Others (No. 1) [1991] ILRM 135 was a case where the Supreme Court exercised such a jurisdiction. The plaintiff’s claim (in part) was for damages for an injury allegedly suffered at birth. Approximately 25 years had passed since that time. The plaintiff was considered to be blameless for the period which had elapsed. Finlay C.J. (with Henchy J. and Hederman J.) delivering the unanimous judgment of the Court on several defendants’ applications to dismiss stated at p. 139:

“In the High Court it was held by Keane J. that the case was governed by the decision of this Court in O’Domhnaill v Merrick [1984] IR 151. I am in agreement with that view of the law. It is unnecessary for me to repeat here the principles laid down by this Court in that case, but they may be summarised in their application to the present appeal as being that where there is a clear and patent unfairness in asking a defendant to defend a case after a very long lapse of time between the acts complained of and the trial, then if that defendant has not himself contributed to the delay, irrespective of whether the plaintiff has contributed to it or not, the court may as a matter of justice have to dismiss the action”.
O’Domhnaill v Merrick [1984] IR 151 was however, a claim to dismiss for want of prosecution. The plaintiff in that case was found to have been in delay and the delay to be inordinate and inexcusable. It was in considering whether there were countervailing circumstances which would justify a disregard of the delay that Henchy J. referred to the principles which appear to have been subsequently relied upon in Toal v. Duignan & Others (No. 1) as set out above. In O’Domhnaill v. Merrick Henchy J. at pp. 157-158 stated:

“After due regard to all relevant factors, I am driven to the conclusion that not only was the delay in this case inordinate and inexcusable but there are no countervailing circumstances which would justify a disregard of that delay. I consider that it would be contrary to natural justice and an abuse of the process of the Courts if the defendant had to face a trial in which she would have to try to defeat an allegation of negligence on her part in an accident that would have taken place 24 years before the trial, and a claim for damages of which she first learned 16 years after the accident. . . .
While justice delayed may not always be justice denied, it usually means justice diminished. In a case such as this, it puts justice to the hazard to such an extent that it would be an abrogation of basis fairness to allow the case to proceed to trial.”
In O’Domhnaill v Merrick, McCarthy J. delivered a dissenting judgment. In Toal v. Duignan a subsequent application was made by a number of other defendants. The appeal in that matter came on before a differently composed Supreme Court to that which decided Toal v. Duignan (No. 1). The latter Court comprised Finlay C.J., Griffin J. and McCarthy J. In that appeal Toal v. Duignan (No. 2) [1991] ILRM 140 Finlay C.J. and Griffin J. upheld the inherent jurisdiction relied upon in the previous appeal. Finlay C.J. at p. 142 stated:

“In the course of the argument on these appeals a question was raised as to whether the court had jurisdiction to dismiss by reason of delay an action which was in fact commenced within a time limit fixed by Act of the Oireachtas.
My judgment in the previous appeal in respect of the other defendants in this case was based on an acceptance of the principles laid down in the judgment of Henchy J. in O’Domhnaill v. Merrick [1984] IR 151, with which Griffin J. agreed.
I have carefully reconsidered the principles laid down in that judgment on the question as to the jurisdiction of this Court in the interests of justice to dismiss a claim where the length of time which has elapsed between the events out of which it arises and the time when it comes for hearing is in all the circumstances so great that it would be unjust to call upon a particular defendant to defend himself or herself against the claim made. I have also reconsidered the dissent from the view expressed by McCarthy J. in the judgment delivered by him in O’Domhnaill v. Merrick.

I adhere to the view expressed by me in the previous appeal in this case that the court has got such an inherent jurisdiction. It seems to me that to conclude otherwise is to give to the Oireachtas a supremacy over the courts which is inconsistent with the Constitution.”

Whilst Finlay C.J. refers to dismiss “by reason of delay” it is clear on the facts of the case that delay is being used in a way which did not connote any culpability on the part of the plaintiff and in the sense I am using “lapse of time”.

Griffin J. in Toal V. Duignan & Others (No. 2) [1991] ILRM 140 at p. 149 expressed himself to be in complete agreement with the conclusion of the Chief Justice as set out above and his reasons. McCarthy J. dissented. He stated that he recognised, notwithstanding his dissent in O’Domhnaill’s case, (and subject to any future review by a full Court) that the weight of judicial opinion was in favour of the jurisdiction of the Court to dismiss an action brought and maintained within the statutory limitation period but then expressed the view that without the culpable delay that existed in O’Domhnaill’s case such jurisdiction may not be exercised so as to dismiss the claim of a non-culpable plaintiff.

From the above analysis of the two decisions in Toal v. Duignan, I have concluded that the Supreme Court has determined that such an inherent jurisdiction exists even in the absence of culpable delay and I am bound by such decisions.

Hardiman J. in J.O’C. v. Director of Public Prosecutions [2000] 3 IR 478 in considering the effect of lapse of time on the fairness of trials referred to the above cases and a number of other decisions and then stated at pp. 499-500:

“Examples of the application of these principles in civil cases can be multiplied. Enough, however, has been said to indicate that it has consistently been held:-
(a) that a lengthy lapse of time between an event giving rise to litigation, and a trial creates a risk of injustice: “the chances of the courts being able to find out what really happened are progressively reduced as time goes on”;
(b) that the lapse of time may be so great as to deprive the party against whom an allegation is made of his “capacity . . . to be effectively heard”;
(c) that such lapse of time may be so great as it would be “contrary to natural justice and an abuse of the process of the court if the defendant had to face a trial which (he or) she would have to try to defeat an allegation of negligence on her part in an accident that would taken place 24 years before the trial . . .;
(d) that, having regard to the above matters the court may dismiss a claim against a defendant by reason of the delay in bringing it “whether culpable or not”, because a long lapse of time will “necessarily” create “inequity or injustice”, amount to “an absolute and obvious injustice” or even “a parody of justice”;
(e) that the foregoing principles apply with particular force in a case where “disputed facts will have to be ascertained from oral testimony of witnesses recounting what they then recall of events which happened in the past . . .”, as opposed presumably cases where there are legal issues only, or at least a high level of documentation or physical evidence, qualifying the need to rely on oral testimony.”
J.O’C v. D.P.P. was an application for an order of prohibition of a criminal trial. The judgment of Hardiman J. was a dissenting judgment. Notwithstanding, the above whilst not necessarily binding on me, is a helpful summary of the earlier cases and assists in identifying principles which should apply when exercising the inherent jurisdiction for which the defendants contend.

The decision of Kelly J. in Kelly v. O’Leary [2001] 2 IR 526 is also of assistance in attempting to analyse the principles according to which the court should exercise such inherent jurisdiction. That was an application to dismiss for want of prosecution. There was a very long delay between the accrual of the cause of action and commencement of the proceedings which Kelly J. found to be inordinate and inexcusable. He referred to the possibility of there being two different tests in a claim to dismiss for want of prosecution and a claim to dismiss in the interests of justice by reason of significant lapse of time but left that question open. He determined the application by applying the principles in Primor plc. v. Stokes Kennedy Crowley [1996] 2 IR 459 in relation to dismiss for want of prosecution referred to above. However in considering the balance of justice question as proposed by the Supreme Court he ultimately reached his conclusion by answering the same two fundamental questions which appear to be raised by the judgments of the Supreme Court in Toal v. Duignan (No. 1), Toal v. Duignan (No. 2) and O’Domhnaill v. Merrick. These are:

1. Is there, by reason of the lapse of time (or delay) a real and serious risk of an unfair trial; and
2. Is there by reason of the lapse of time (or delay) a clear and patent unfairness in asking the defendant to defend the action.
The constitutional requirement that the courts administer justice requires that the courts be capable of conducting a fair trial. This, as was submitted, is required by Article 34 of the Constitution. Accordingly, if a defendant can on the facts establish that having regard to a 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.

Also, if a defendant can establish that a lapse of time for which he is not to blame is such that there is a clear and patent unfairness in asking him now to defend the claim then he may also be entitled to an order to dismiss. This entitlement derives principally from the constitutional guarantee to fair procedures in Article 40.3 of the Constitution.

Whilst in some of the cases the judgments have referred to matters under both these headings they appear to be potentially separate grounds upon which the inherent jurisdiction to dismiss may be exercised.

The factor to be considered by the court in relation to each question may overlap. It appears to me that these may include:-

1. Has the defendant contributed to the lapse of time.
2. The nature of the claims.
3. The probable issues to be determined by the court; in particular whether there will be factual issues to be determined or only legal issues.
4. The nature of the principal evidence; in particular whether there will be oral evidence.
5. The availability of relevant witnesses.
6. The length of lapse of time and in particular the length of time between the acts or omissions in relation to which the court will be asked to make factual determinations and probable trial date.
Further, on the second question it will be relevant to consider any actual prejudice to the defendant in attempting to defend the claim by reason of the lapse of time.

Breach of Article 6 of ECHR

It was agreed in the course of the hearing that I should only consider the defendants’ applications based on Article 6 of the ECHR in the event that it became necessary. By reason of the conclusion I have reached on each of the above grounds I do not propose considering the applicable law to this ground.

Conclusions

I have considered and reached a conclusion on each of the defendants’ applications under each of the first two grounds, want of prosecution and dismiss in the interest of justice. I have done this as the defendants differed in their approach as to the primary ground relied upon. Also, by reason of the extensive submissions made it appeared appropriate that I should do so to avoid the expense of a further application in the High Court in the event that I was considered to be wrong in my conclusion as to the applicable law or its application to the facts of these applications on either ground.

Want of prosecution

Delay

The relevant dates in each claim are as follows.

Ms. Manning:

Assumed accrual of cause of action May, 1995

Issue of plenary summons 25th May, 1998

Service of plenary summons 28th April, 1999

Entry of appearance 29th April, 1999

Correspondence from Arthur Cox calling for statement of claims/threatening motion to dismiss: 26th November, 2001, 10th December, 2001, 25th January, 2002, 18th April, 2002, 26th July, 2002 and 17th October, 2002.
First motion to dismiss issued 21st August, 2002
(return date 19th November, 2002).
Delivery of statement of claim 18th November, 2002.
First notice for particulars 23rd January, 2003.
Order compelling plaintiff to furnish replies to particulars
28th April, 2003
Plaintiffs replies to notice of particulars 16th June, 2003
Second notice of particulars 2nd September, 2003
Plaintiffs replies to second notice for particulars 11th February, 2004
Issue of second motion to dismiss 3rd March, 2004
Issue of plaintiff’s motion for judgment in default of defence 11th March, 2004
Ms. Garland
Assumed accrual of cause of action August, 1997
Issue of plenary summons 20th July, 2000.
Service of plenary summons 12th June, 2001.
Entry of appearance 14th June, 2001.
Correspondence from McCann FitzGerald calling for statement of claim/threatening motion to dismiss 19th November, 2001, 1st February, 2002, 10th April, 2002.
Delivery of statement of claim 22nd November, 2002.
First notice for particulars 20th December, 2002
Plaintiff’s reply to particulars 19th December, 2003.
Plaintiff’s motion for judgment in default of default of defence issued 22nd January, 2004 (Returnable 9th February 2004)
Second notice for particulars 29th January, 2004.
Plaintiffs replies to particulars 9th February, 2004.
Motion to dismiss issued 27th February, 2004.
Ms. McNevin
Assumed accrual of cause of action November, 1995
Issue of summons 29th October, 1998
Service of summons 29th September, 1999
Entry of appearance 6th October, 1999
Correspondence seeking statement of claim/threatening motion to dismiss 10th December, 2001, 11th January, 2002, 21st January, 2002, 13th February, 2002.
First motion to dismiss 31st May, 2002.
Order of Master extending time by three weeks 9th July, 2002.
Second motion to dismiss issued 24th September, 2002 (not served).
Delivery of statement of claim 25th September, 2002.
First notice for particulars 3rd December, 2002.
Replies to particulars 22nd December, 2003.
Plaintiff’s motion for judgment in default of defence issued 22nd January, 2004.
Second notice for particulars 29th January, 2004.
Replies to particulars 9th February, 2004.
Third motion to dismiss issued 24th February, 2004.
The relevant periods for the purpose of considering the allegation that there has been inordinate delay in respect of each of the plaintiffs are:

Ms. Manning

Period between accrual of cause of action and issue of summons – almost three years.
Period between issue and service of summons – eleven months.
Period between appearance and delivery of statement of claim – three years and seven months
Period between first notice for particulars and replies (alleged to be incomplete) – six months
Ms. Garland

Period between accrual of cause of action and issue of summons – two years eleven months.
Period between issue and service of summons – almost eleven months
Period between appearance and delivery of statement of claim – one year and five months
Period between first notice for particulars and replies (alleged to be incomplete) – one year.
Ms. McNevin

Period between accrual of cause of action and issue of summons – two years and eleven months.
Period between issue and service of summons – eleven months.
Period between appearance and delivery of statement of claim – two years and eleven months
Period between first notice for particulars and replies (alleged to be incomplete) – 19 days.
Considering the nature of the claims made by the plaintiffs and even assuming to their benefit that the claims are complex claims to prepare and plead the delays subsequent to the accrual of the cause of action both in the commencement and subsequent pursuit of the proceedings must be considered to be inordinate.

I am reinforced in the conclusion I have reached by the fact that Quirke J. in Eileen O’Connor v. John Player & Sons Limited and Ors. (The High Court, Unreported 12th March, 2004) in relation to similar claims with similar periods reached the same conclusion.

Inexcusable

While counsel for the plaintiffs made no concession in relation to the delays being inexcusable, he did not seek to reopen all the issues under this heading determined by Quirke J. in his judgment in O’Connor v. John Player & Sons and Ors. relating to the arrangements for the collection of medical records. I have considered carefully Mr. Ward’s affidavits, the correspondence referred to, the affidavits sworn by the solicitors for the defendants and the correspondence referred to therein. The furthest the matter can be put from the plaintiffs perspective is that there may have been a misunderstanding by the plaintiff’s solicitors during some period as to whether they were obliged to deliver a statement of claim without the full medical records of the relevant plaintiff having been collected. The relative inactivity of the defendant’s solicitors in seeking a statement of claim in Ms. Manning’s and Ms. McNevin’s cases during 2000 and first part of 2001 may have contributed to any such misunderstanding. However, even if such a misunderstanding did occur, such misunderstanding must have come to an end when the defendants’ solicitors in each of these cases wrote the first letter calling for the delivery of a statement of claim in November/December, 2001. Even if I were to accept that the arrangements in relation to medical records offered an excuse for the period between the entry of appearance and the first letter calling on the plaintiff to deliver a statement of claim it does not appear that such acceptance could prevent the conclusion that the balance of the delays between the accruals of the causes of actions and the point in each proceeding reached by the date of issue of the current motions is both inordinate and inexcusable.

Given the nature of the claims and the fact that they include alleged wrongful acts stated to have happened many decades ago the plaintiffs were under a particular duty to proceed with due expedition following the accrual of the cause of action. Taking that into account and the difficult nature of the claims being brought it appears to me that it would have been reasonable for the plaintiffs to have reached the present stage in the proceedings i.e. replies to particulars raised on the statement of claim within a maximum period of two years (cause of action to issue and service one year; appearance and statement of claim six months; particulars and replies 6 months). Even assuming in Ms. Manning’s and Ms. McNevin’s cases further periods of two years and one and a half years respectively may be excusable the minimum periods of delay in each of the claims of the date of hearing of these applications to dismiss were approximately in Ms. Manning and Ms. McNevin claims five years and Ms. Garland claim four and a half years.

Whilst Mr. Ward has referred in his grounding affidavits to the streamlining process which took place counsel for the plaintiffs did not pursue this as an excuse before me.

Each of the defendants relied specifically and in my view with justification upon the absence of any explanation whatsoever for the delay in the issue of proceedings. No plaintiff has sworn an affidavit. There is absolutely no explanation as to why in each case no proceedings were not issued until almost three years after the date of diagnosis relied upon nor indeed why the summons was not served in each case for approximately eleven months.

Balance of justice

For the reasons set out above in this judgment in considering the issues to which this court is directed by the judgment of Hamilton C.J. in Primor Plc v. Stokes Kennedy Crowley under the heading of balance of justice in an application to dismiss for want of prosecution the court is confined to considering the impact of delay since the accrual of the causes of action.

On behalf of the defendants it was submitted that even if the court is confined to considering delay since the accrual of the cause of action that the court must consider such delay and the prejudice caused by such delay both in the context of the nature of the claims and the progress made to date in the proceedings. I accept that submission.

A consideration of the statements of claim and replies to the notices for particulars in each of the proceedings makes it clear that the claims being advanced by each of the plaintiffs are extremely wide ranging. The wrongful acts alleged go back to the start by each defendant of the sale/distribution/manufacturer of cigarettes in Ireland which appears to have been in the early twentieth century. They also expressly refer to acts prior to the commencement of smoking by each of the plaintiffs i.e. prior to 1948, 1942 (or 1945) and 1968 respectfully. The wrongful acts alleged are multiple. It was submitted, and again on the facts I accept the submission, that there is, in the proceedings to date a lack of specificity in relation to the claims being made by each plaintiff against the relevant defendant. Similar allegations are made against all defendants and appear to be made irrespective of particular facts which might be associated with each plaintiff.

Each plaintiff is bringing a claim for damages for personal injury loss and damage against one or more defendants by reason of alleged torts and other wrongs alleged to have been committed by that defendant. Each claim would have to be considered and proved individually. Each plaintiff would have to establish that a named defendant owed a duty of care to her; was in breach of that duty of care and such breach caused the injury or damage alleged. Viewed in this context, the defendants appear to me justified in submitting that relatively little progress has been made in the proceedings to date in identifying the particular claims of each plaintiff against the relevant defendant and that it is unlikely that these claims, would if permitted to proceed, come to trial for a further number of years.

The affidavits sworn by Ms. Foley, Mr. Bourke and Mr. Beresford as solicitors for each of the defendants respectfully undoubtedly refer by way of primary prejudice to what I have referred to as the lapse of time from the date of the alleged wrongful acts. However, they also refer to prejudice from delay and lack of progress in the prosecution of the proceedings. I have also concluded from a consideration of the potential witnesses or persons identified therein who might assist the relevant defendant in the preparation of the claims that there are a limited number of persons who have died within the periods of delay identified and more particularly that for other persons, already quite elderly delays of four to five years as a matter of probability will reduce the potential of such persons to give meaningful assistance or act as a witness. I have concluded that each of the defendants as a matter of probability has suffered prejudice by reason of the inexcusable period of delay since the accrual of the causes of action.

Counsel for the plaintiffs submitted that each of these defendants had engaged in the proceedings with the plaintiffs such that it would be unjust to the plaintiffs, notwithstanding any prejudice caused by the delay to dismiss the claims. The engagement relied upon as set out in the affidavits of Mr. Ward sworn in each application. Essentially the engagement alleged falls into two parts:-

1. The arrangements made in relation to the collection of medical records; and
2. The steps taken in the proceedings including in particular compelling the delivery of the statement of claim and requiring the furnishing of replies to particulars.
In response, it is submitted on behalf of all the defendants that these were reasonable steps to have taken on behalf of the defendants and should not on the facts debar the defendant from obtaining the order to dismiss. Also, that the defendants could not ascertain properly until after the delivery of the statements of claim and replies to particulars whether or not the defendants would be able to deal with the claims or whether the prejudice or unfairness to the defendants or indeed the inability for a fair trial to be conducted would be such that the defendants would be entitled to an order for dismissal.

The principles set out in Primor Plc v. Stokes Kennedy Crowley and Ors. make clear that the courts must consider the engagement of the defendant with the plaintiff on the facts of each case. It appears to me that the steps taken by the defendants in relation to each of these plaintiffs to date in the context of the relevant claim were reasonable and are not such as to debar their entitlement to an order to dismiss if the facts otherwise so dictate. Inevitably the steps taken by the defendants will have resulted in the plaintiff incurring costs in processing their claim.

Counsel for the plaintiffs submitted that where a plaintiff fails to duly prosecute a claim that the defendant is put on election either to bring an application to dismiss for want of prosecution or to compel the plaintiff to proceed. I do not accept that any such generalised principle exists. Rather it appears to me that the conduct of the defendant must be considered on the facts of each case as set out by Hamilton CJ in Primor Plc v. Stokes Kennedy Crowley. It must be open to a defendant as was done in two of these claims to bring a motion to dismiss in the absence of a statement of claim but if it is then delivered not to pursue the motion without necessarily being prevented from bringing a further motion to dismiss for want of prosecution at a later stage if the facts so require.

In Ms. Garland and Ms. Nevin’s claims reliance was sought to be placed upon the fact that the defendants’ current motion to dismiss was issued after the plaintiffs’ motion for judgment in default of defence. I do not consider that this materially alters the balance between the plaintiff and the defendant.

Conclusion on want of prosecution

I have concluded on each of the defendants’ applications to dismiss for want of prosecution that even limiting my consideration of the impact of delay to those periods since the accrual of the causes of action considered to be inexcusable that the balance of justice is against permitting each plaintiff to proceed with her claim and accordingly that I should grant an order to dismiss in respect of her claim on this ground. I would emphasise that a significant factor in my so concluding is the nature of the claims as pleaded and lack of real progress made on behalf of the plaintiff in each of these claims since the commencement of proceedings. Even taking into account the very difficult nature of the claims sought to be made out, the almost standard form statement of claim; scattergun approach in the allegations of wrongful acts and generalised responses in the replies to particulars and complete lack of specificity relating to the individual plaintiff and relevant defendants mean both that the probable length of time between now and the date of a trial is increased as is the prejudice caused by the inexcusable delay and the prejudice and unfairness to the defendant in allowing the claim as pleaded and particularised to proceed.

Dismiss in the interest of justice.

For the reasons identified above the questions which I have to consider on the facts of each case are:-

1 Is there, by reason of the lapse of time a real and serious risk of an unfair trial; and
2 Is there by reason of the lapse of time a clear and patent unfairness in asking the defendant to defend the action.
The relevant lapses of time are the periods between the wrongful acts alleged on which a court will be asked to make determinations and the probable trial dates.

I have earlier identified the factors to be considered by the court in reaching a conclusion on the above questions. On the facts of each of these applications my consideration is as follows:-

1 None of the defendants can be considered to have contributed in any significant way to the relevant lapse of time.
2 The claims being made are extremely wide ranging both in the nature of the wrongful acts alleged and the time over which they are alleged to have occurred.
3 There will be significant factual issues to be determined by the court if the claims went to trial.
4 There will inevitably have to be much oral evidence. Counsel for the plaintiffs sought to submit that significant issues might be determined on documentary evidence. I do not accept this, the primary factual issues in relation to what was done; the scientific information available to or which ought to have been available to the defendants and the decisions taken in light of same would have to be decided on oral evidence.
5 I am satisfied on the affidavits sworn by the solicitors for each of the defendants that a significant number of relevant witnesses to the fundamental claims made which appear to relate to the period prior to and early years of smoking of each of the plaintiffs will not now be available to the defendants.
6 The lapse of time between many of the wrongful acts alleged and hence factual issues the court would have to decide and a probable trial date is extremely long. In relation to certain issues in all cases it may be almost 100 years. For many others it will be at least 60 years in Ms. Manning’s and Ms.Garland’s cases and 40 years in Ms. McNevin’s case.
My reasoning in reaching the above conclusions is perhaps most easily understood by taking as an example two of the claims which appear fundamental to each of the plaintiffs’ cases against her defendant. In para. 4 of each of the statements of claim it is pleaded:

“At all material times, the Defendant in the full knowledge as to the addictive nature of the tobacco and cigarettes manufactured and supplied by it manipulated and orchestrated the tar and nicotine levels to increase and continue the addictive nature of the said products for the purpose of commercial gain without any or any due regard as to the health, safety or welfare of the plaintiff and other availing of and using the said product, and for the purpose solely of creating a dependence thereon.”

In replies to particulars Ms. Manning has identified that the “material times” in the above paragraphs refer to “when the defendant initially started selling/distributing/manufacturing cigarette products”. It is further clarified in the second reply to particulars that the plaintiff alleges that the defendant ought to have ceased manufacture, distribution, sale and supply of all tobacco products prior to 1948.

In Ms. Garland’s case, in the replies to particulars “material times” is identified as referring to “when the defendant initially started the manufacturing, distribution and supply of the cigarette products”. In reply to the notice for further and better particulars it is stated “in addition in relation to this particular plaintiff from 1942 when she commenced smoking”.

In Ms. McNevin’s case the “material times” are identified as referring to “when the defendant initially started selling/distributing/manufacturing cigarette products”.

At para. 5 of each of the statements of claim there is a further broad claim made in the following terms:

“In addition, at all material times the defendant, its servants or agents knew or ought to have known that the said tobacco and cigarette products gave rise to and did cause a risk of harm and damage and adverse medical and psychological consequences and despite the said knowledge continued to advertise, manufacture, distribute and sell the said products without any or any adequate or appropriate regard to the health of consumers of the said product including the plaintiff and/or were reckless as to the consequences and the health of consumers of the said product including the plaintiff”.

In the replies to particulars the plaintiffs have identified that “at all material times” as meaning in relation to this plea “since the defendant started selling/distributing/manufacturing cigarettes in Ireland”.

Further the servants or agents of the defendant are stated to “include subsidiaries, parent companies, successors, assignees, manufacturers, distributors and all other companies relating to the manufacture/distribution and sale of cigarettes and/or tobacco products”. The plaintiffs have each though requested failed to identify when it is alleged the particular defendant started selling, distributing or manufacturing in Ireland.

Amongst the particulars of negligence (and which might appear to support either of the above claims) in the statements of claim are:-

(i) Persisting in manufacturing, marketing and distribution the said cigarettes notwithstanding their knowledge of the fact that same, when used as intended, gave rise to dependence and were harmful to human health;
(j) Failing to desist from manufacturing, marketing and/or distributing the said cigarettes notwithstanding that it knew or ought to have known that same when used as intended, gave rise to dependence and were harmful to human health;
(k) Failing to take any or any adequate care in or about the processing of the said cigarettes;
(l) Failing to heed warnings in scientific and medical literature and/or in the scientific and medical community of the fact that cigarettes, when used as intended, gave rise to dependence and were harmful to human health;
(p) Failing to properly investigate research and advise upon the extent and manner in which the said product, when used as intended, gave rise to a dependence and were harmful to human health;
(r) Knowingly withholding from the plaintiff, information to enable her to make an informed decision as to whether or not she used the defendant’s product;
The above are only a small sample of the claims and particulars of negligence alleged. It seems difficult to conclude other than I have done above in the light of such claims being made and persisted with.

As is clear from the above the allegations being made by the plaintiffs go back to the time at which it is alleged that the defendants commenced selling/distributing/manufacturing cigarettes in Ireland. On Ms. Foley’s affidavit whilst there appears some doubt about the alleged activity in Ireland of Benson and Hedges Limited prior to the date Ms. Manning alleges she commenced smoking it has long been manufacturing cigarettes in the United Kingdom. Mr. Bourke’s affidavits suggests that the defendant John Player & Sons Limited forms part of a group which has carried on the business of manufacturing/selling/distributing cigarettes in Ireland at least through the entire of the twentieth century. In the case of P.J. Carroll & Co. it appears from Mr. Beresford’s affidavit that it commenced manufacturing cigarettes in Ireland in 1906. Hence it appears in respect of each of the defendants that as a matter of probability the claims would require the court to decide issues of fact pertaining to the state of scientific knowledge which they either were aware of or ought to have been aware of and the precise decision taken by the defendants not only in relation to the manufacturing but including detailed decisions effecting such matters as the level of nicotine over much of the twentieth century. Many of these issues would have to be determined on oral evidence and it is improbable that the relevant witnesses would be available to the defendants relating to the earlier part of the twentieth century.

For a court to be asked in the years 2006 or 2008 or later to determine issues of fact of the nature which would be required by these claims as to what was or was not done and why in the early part or even 40 years ago and in the probable absence of many of the persons actually involved in the words of Henchy J. in O’Domhnaill v Merrick [1984] IR 151 “puts justice to the hazard”.

Accordingly, I have concluded that by reason of the lapse of time between the multiple wrongful acts alleged more than 40 years ago in Ms. McNevins case and more than 60 years ago on Ms. Manning and Ms. Garland’s cases and the probable hearing date of these plaintiffs’ claims that there is a real and serious risk of an unfair trial if these claims were to be permitted to continue.

I have also concluded by reason of the same lapse of time and nature of the claims that there would now be a clear and patent unfairness in asking the defendants to defend each of these actions now brought against them.

Order

On each of the motions I will make an order dismissing the named plaintiff’s claim.

Approved: Finlay Geoghegan J.

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.

 

 

Poole v O’Sullivan

[1993] ILRM 55
Morris J
This matter comes before me by way of an application for the trial of a preliminary issue arising out of the Statute of Limitations 1957, the defendant contending that the plaintiff’s proceedings have not been brought within the statutory period.

The facts and circumstances in which the application arises are as follows. The plaintiff was working as a caretaker in Scoil Assaim in Raheny on 8 July 1987 when he suffered an accident and sustained personal injuries which he *56 claims arose because of the negligence of his employers. Prior to the issuing of proceedings there was correspondence between the plaintiff’s solicitors and the insurance company indemnifying his employers and ultimately it was agreed that the present defendant, Father Philip O’Sullivan would be named to represent the defendant’s interest in the matter. Having clarified the position and at a time prior to the expiration of the statutory period of three years, the summons was transmitted to the plaintiff’s solicitors’ agents for issue in the Central Office. This occurred on 4 July 1990. However it was not possible to issue the summons because the Central Office were not prepared to accept the summons with the word ‘Father’ included in the title of the action before the defendant’s name and, moreover, they indicated that it should have been included in the endorsement of claim that the defendant was being sued in his capacity as a religious person. The summons was duly returned to the plaintiff’s solicitors who received it back on 9 July 1990 which is a Monday and was the day after the three year period had expired. The amendments were immediately made and the summons was returned to the Central Office where the summons was issued on 9 July 1990.

The relevant dates in the matter are as follows. The accident is alleged to have happened on 8 July 1987. Three years expired on Saturday, 7 July 1990. The Central Office of the High Court was open on neither Saturday, 7 July 1990, nor Sunday, 8 July 1990. The summons was issued on 9 July 1990.

S. 11(2)(b) of the Statute of Limitations 1957 provides that an action claiming damages for negligence, nuisance or breach of contract … where the damages claimed by the plaintiff for the negligence, nuisance or breach of contract consist of or include damages in respect of personal injuries to any person, shall not be brought after the expiration of three years from the date upon which the cause of action accrued. McMahon J held in McGuinness v Armstrong Patents Ltd [1980] IR 289 that the date upon which the accident occurred:

must be deemed to be included in the period of three years allowed by s. 11(2)(b) of the Statute of Limitations 1957.

Accordingly it is argued by counsel for the defendant that the limitation period expired at midnight on 7 July 1990 and that since the summons was not issued until 9 July 1990 it is statute barred.

In support of his argument counsel for the plaintiff has drawn my attention to a decision of the Court of Appeal in England, Pritam Kaur v S. Russell & Sons Ltd [1973] QB 336 in which the court had to deal with precisely the same point as arises in this case. In that case Lord Denning approached the problem in what would appear to me to be a simplistic way by simply saying that since the Rules of Court provide that if the time expires on a Sunday or any other day upon which the court is closed then the act is done in time if it is done on the next day on which the court is open and he concludes ‘I think we should apply a similar rule when the time is prescribed by statute. By so doing we make the law consistent in itself and we avoid confusion to practitioners’. I find this reasoning unsatisfactory. While the same rule is to be found in the Superior Court Rules O. 122 r. 9 it does not appear to me that this can be relied upon as a basis for the extension of a time fixed by statute. In the judgments of Karminski LJ and Megarry J an approach to the question appears which to my mind is far more satisfactory. Having reviewed the relevant authorities Megarry J concludes his judgment with the following words with which I find myself in complete agreement:

Accordingly, in my judgment the result is as follows. There are a number of cases which support the general rule that a statutory period of time whether general or special, will, in the absence of any contrary provision, normally be construed as ending at the expiration on the last day of the period. That rule remains; but there is a limited but important exception or qualification to it which may be derived from a line of authorities which include Hughes v Griffiths, Mumford v Hitchcocks, the judgments of Sellers LJ in Hodgson v Armstrong and The Scottish cases. If the act to be done by the person concerned is one for which some action by the court is required, such as issuing a writ, and it is impossible to do that act on the last day of the period because the offices of the court are closed for the whole of that day, the period will prima facie be construed as ending not on that day but at the expiration of the next day upon which the offices of the courts are open and it becomes possible to do the act. In this appeal there is nothing in the facts of the case which ousts the prima facie application of this exception, which accordingly applies. Therefore I concur in allowing the appeal.

The basis for the court’s reasoning in Pritam Kaur v S. Russell & Sons Ltd was the proposition that there is no power vested in the court to enlarge a period of time laid down by statute, however, the court can and should define the period. If the period expires on a day when the offices of the court are closed, the plaintiff will not have the full period intended by Parliament but a shorter period. This approach was adopted in Hughes v Griffiths (1862) 13 CB (ns) 324 where Erle CJ at 333 said:

Where the act is to be done by the court, and the court refuses to act on that day, the intendment of the law is that the party shall have until the earliest day on which the court will act.

Accordingly in my view the fact that the Central Office was closed on 7 July 1990 and on 8 July 1990, they being Saturday and Sunday respectively, and since the plaintiff was unable to ‘set the court in motion’ on those days it appears to me that in the circumstances of this case the period envisaged by the Statute should be construed as ending on the next day upon which the offices of the court are open and it becomes possible to do the act required.

On the facts of the case the plaintiff issued the plenary summons on 9 July 1990 which was the first day upon which the courts were open after midnight on 7 July 1990 and accordingly in my view the plenary summons has been issued within the time limit provided by the Statute of Limitations.

 

Bula Ltd v. Crowley

, High Court, February 20, 2001, Barr J.

RULING by Mr. Justice Barr made on the 20th day of February, 2001.
1. There are two motions presently before the court on which rulings are required prior to the trial of issues arising out of the Statute of Limitations .

2. First, the plaintiffs were given liberty by Morris P to issue revised Points of Claim which it is submitted relate to outstanding limitations issues. The defendants submit that what the plaintiffs are seeking to do is to introduce new claims which are within the ambit of an order made by me in this action on 18th June, 1997 and an undertaking given by the plaintiffs pursuant thereto the effect of which prohibits them from making new claims against the defendants or any of them of which the plaintiffs were aware or ought to have been aware at that time. The first preliminary issue for determination, therefore, is whether or not the new claims now sought to be introduced by the plaintiffs are captured by the foregoing prohibition and, therefore, may not be introduced in this action.

3. The second matter is related to the first and arises out of a motion brought by the plaintiffs in which they seek further discovery of documents in connection with the new claims in the proposed revised Points of Claim which it is sought to introduce in connection with the limitation of action issues which are about to be tried by this Court i.e., the residue of outstanding issues in the Bula II action.

4. There is a protracted, intricate history of litigation between the parties to the present action and other parties regarding ore-bearing lands the property of the plaintiff company (Bula) which has gone on for upwards of 14 years. It is unnecessary to refer to each such action. Suffice it to state that there are, or were, two main actions each brought by Bula and its guarantors (Mr. Wymes, Mr. Wood, Mr. Roche Senior – since deceased – and Mr. Roche Junior). In practical terms the person who at all material times has driven the plaintiffs’ litigation in those and other related actions is Mr. Wymes. He has demonstrated over the years a dedicated determination to do everything which he perceives is possible to prevent the sale of Bula’s ore-body notwithstanding the outcome of litigation so far which has been adverse to the interest he seeks to pursue.

5. The first major action was brought by the plaintiffs against Tara Mines and others (Bula I). It continued for 277 days in the High Court before Lynch J and culminated in a judgment in which the learned trial judge rejected the plaintiffs’ claims and , inter alia , criticised the reliability of Mr. Wymes. An appeal was brought to the Supreme Court against that judgment. While the appeal was outstanding the second major action (Bula II i.e., the present action) was commenced before me. It relates, inter alia, to claims made against the Banks named therein and the Receiver who had been appointed by them over the assets of Bula. A number of issues were raised by the plaintiffs in Bula II arising out of facts which had already been determined in Bula I by Lynch J. This posed a question as to whether in the circumstances I should regard myself as bound by the findings of fact made by Lynch J unless and until any such finding was rejected by the Supreme Court on appeal. Having heard arguments on both sides, I delivered a reserved reasoned ruling on that issue on 29th April, 1997. I decided that, subject to the outcome of the appeal in Bula I, I was bound by the findings of fact made by Lynch J in that action. Ultimately it was conceded on behalf of the plaintiffs that if the Supreme Court upheld the judgment of Lynch J, including his findings of fact therein, the plaintiffs could not succeed on any of the issues raised in Bula II save only those relating to the Statute of Limitations. The plaintiffs sought an adjournment of the “non-limitations” issues in Bula II pending the outcome of the appeal in Bula I. They wished to proceed with the issues relating to the Statute of Limitations. However, the defendants were unwilling to proceed with the latter. It was contended that there were issues of fact involved on which the Supreme Court judgment might have a bearing.

6. There is also a third action which has substantial significance in relation to the foregoing issues presently before this Court. Bula commenced an action by plenary summons dated 13th March, 1997 against Mr. Crowley, the Receiver. In it an Order was sought by Bula against the defendant directing him to deliver up possession of the Bula lands consequent upon the contention that his right to possession has been extinguished pursuant to statute. Damages were also sought for trespass, detention, conversion, breach of contract, negligence and/or breach of duty, intimidation, conspiracy, acting in excess of authority, abuse of process, mesne profits, interest and costs. An appearance was entered on 21st March, 1997. Notice of intention to proceed dated 14th May, 1999 was served and on 21st June following a Statement of Claim was delivered. A lis pendens was registered on 17th May, 1999.

7. The Statement of Claim, which ran to 40 paragraphs, was summarised by Carroll J in a reserved judgment to which I shall refer presently in the following terms:-

“In the Statement of Claim Bula claimed the total amount of principal monies advanced by the banks between 1974 to 1984 was £5,000,000.00. The repayment of principal monies and accrued interest was secured by debentures or mortgages dated between 1974 and 1984. The dates of demand for repayment for all monies claimed due were the 25th June, 1982 for NBFC, 28th July, 1982 for UIB and 5th August, 1983 for AIIB. It sets out payments to NBFC between the 30th March, 1983 and 19th December, 1984, to UIB between April 1983 and October 1984 and to AIIB between March 1983 and October 1984. It claims the dates from which time commenced to run for limitation purposes in favour of Bula were the 19th February, 1986 for NBFC, 31st October, 1984 for UIB and 19th October, 1983 for AIIB. It claims payment to NBFC by way of payments to principal and capital as arranged and agreed, both subsequent to making the demands and prior thereto, as well as amounts held in suspense accounts with accrued interest are sufficient to repay the principal debt.
It claimed the Banks did not issue proceedings within the time limit prescribed by the Statute of Limitations to claim a sale but relied on the Receiver to sell the property and pay to them the net proceeds of sale. The Banks did not issue proceedings against Bula until 4th April, 1997. Proceedings seeking well charging orders were not issued until 22nd April, 1997 and were not served until 30th March, 1998. The plaintiff claimed that as a result the Receiver’s title to the land and any right to execute for repayment of principal and interest was extinguished as from the 19th February, 1992 for NBFC and 31st October, 1996 for UIB and 19th October, 1995 for AIIB. It claimed it was entitled to have the Receiver discharged, the mortgages and debentures cancelled, assets returned, and documents of title returned with documents received as Receiver and Manager.”
8. On 5th July, 1999 the Receiver issued a notice of motion claiming that the proceedings should be struck out –

as disclosing no reasonable cause of action and/or being frivolous or vexatious under Order 19 rule 28 of the Rules of the Superior Courts;
under the inherent jurisdiction of the Court as an abuse of process;
on the grounds that the issues raised could have been, but were not raised in the Bank Action (i.e., Bula II);
as contravening the undertaking given in the Bank Action not to mount any further proceedings against any of the defendants in respect of alleged wrong doing of which they were aware or ought to have been aware in June, 1997.
9. An Order vacating the lis pendens registered in the action was also sought.

10. The motion duly came on for hearing before Carroll J and her reserved judgment to which I have already referred was delivered on 15th December, 2000. Inter alia , she considered specifically the grounds relating to breach of undertaking by the plaintiffs referred to in my order of 18th June, 1997, under which they are prohibited from pursuing the

defendants or any of them in respect of any claim which they knew or in the opinion of the Court ought to have been aware at the time of the undertaking. She held that the Receiver’s motion succeeded on that ground and that, accordingly, it was not necessary to rule on the other grounds which had been advanced in the application.
11. In the final paragraph of her judgment Carroll J dealt with the submission made on behalf of Bula that there had been an abuse of the process of the Court by the Banks in not informing me in Bula II on or before 18th June, 1997 about proceedings claiming debts and seeking well-charging orders which had been instituted at that time, and in seeking to utilise such proceedings, not for the purpose stated therein, but simply as a means to stop time running against the claimants. That finding is referred to hereunder .

12. Various affidavits, including several of great length, were filed on behalf of the respective parties. The first was that sworn by Mr. Crowley to ground the motion. It was summarised as follows in the judgment of Carroll J

“He was appointed Receiver and Manager on 8th October, 1985 under the banks’ debentures. He believes that it is clear and indisputable as a matter of fact and law that monies are in fact ……. owing by Bula to NBFC and that Bula’s claim that debts due are statute barred or discharged in full is without foundation. No issue of title to land is involved. He stated that the total indebtedness of Bula to the banks as of 30th April, 1999 was IR£60,024,884.86. When he last attempted to sell the ore-body in 1986 the Bank Action [Bula II] was commenced. He also referred to the Tara Action [Bula I] and the finding of Lynch J in his judgment of the 6th February, 1997 that a payment to NBFC on the 19th February, 1986, was made with the authority of Bula. The statutory period therefore could not expire before 19th February, 1998 by which time proceedings had been instituted by NBFC on the 22nd April, 1997 thereby stopping the statute from running. He referred to the Bank Action and the conditions under which the adjournment was granted pending the determination of the Supreme Court appeal of the Tara Action, namely if the appeal were unsuccessful, the primary claims would stand dismissed without prejudice to claims on foot of the Statute of Limitations relating to AIIB and UIB. He also referred to the undertaking not to mount any further proceedings against the defendants in respect of any alleged wrongdoing of which they were presently aware or in the opinion of the Court ought to be aware. He referred to other sets of proceedings, the instant one, a similar one against the banks and the ones instituted by the banks against Bula on the 22nd April, 1997. On 22nd August, 1997 Bula Holdings instituted proceedings against Bula for alleged advances amounting to £100,950,780.00. He claimed that once the Supreme Court dismissed the Tara Appeal he was entitled as receiver to dispose of the lands. He commenced a marketing campaign and he executed a confidentiality agreement at considerable cost which would be wasted if the sale could not proceed….
He relies on the fact that the claim does not query the title of Bula, but merely seeks to attack his authority as Receiver. Therefore the lis pendens should be vacated. He relies on the undertaking not to mount any further proceedings in respect of alleged wrongdoing of which they were then aware or ought to have been aware, since the allegations in these proceedings rely on facts known to the plaintiff on the 18th June, 1997, but were not known in March 1997 when the proceedings issued. It was not known that Barr J would hold the NBFC debt was acknowledged in February 1986. The claim of alleged wrongdoing relies on the facts unknown when the plenary summons issued but which were known when the undertaking was given. This involves a clear breach of the undertaking.
He claims Mr. Wymes, for Bula, contests the claim made in the Bank Action [Bula II] that the right to repayment of principal sums and interest expired against the NBFC on the 14th December, 1996, the last payment having been made on 14th December, 1984 (i.e. 12 years). The effect of the decision of Barr J that for the NBFC the latest payment was made on 19th February, 1986, would mean that the statutory period had not expired until the 19th February, 1998, but the plaintiff contended in paragraph 23 of the Statement of Claim that the period of limitation expired on the 19th February, 1992, which he [the Receiver] says is unstateable. If the NBFC’s debt is not statute barred the validity of his appointment is unaffected.
He refers to the terms of the relevant mortgages which provide that when demand was made all monies owing should be paid and all such monies should be capitalised and form an aggregate principal sum as from the date of demand. Therefore the principal is the sum owing to NBFC on the 25th June, 1982 (date of demand) amounting to £5,347,137.53 taking account of all repayments. Interest continued to accrue on that sum. As of the date 19th February, 1986 the total sum due was £7,645,132.60.
He said even if the acknowledgement of the 19th February, 1986 only acknowledges principal and even if total payments between date of demand and 19th February, 1986 goes to principal, there still remained £2,110,961.68 as of 19th February, 1986. This could only have become barred on 19th February, 1998 by which time the bank’s possession proceedings had been instituted. He said claims made in these proceedings could and should have been made in the Bank Action and there is also a breach of the undertaking. He also claimed without prejudice that the Statute of Limitations ceased to run against the banks on his appointment as Receiver”.

13. Carroll J referred to the affidavits in reply sworn by Mr. Wymes and set out at length the case made by him. The learned judge stated, inter alia,

“He says the essence of the plaintiffs’ case in these proceedings is that the Receiver no longer has any title or authority to act in relation to Bula’s assets because the principal and interest due to UIB and AIIB and the interest due to NBFC are statute barred and the principal due to NBFC is extinguished by payments made to NBFC and payments to NBFC suspense accounts with accrued interest. He says that a question also arises as to the monies received by NBFC on foot of guarantees by T.C. Roche and T.J. Roche. He referred to payment to NBFC prior to demand of £1,262,235.70”

14. Mr. Wymes referred in detail to suspense accounts at NBFC and claimed that the total of suspense account money with accrued interest amounted to £4.4 million and serves as a setoff against the £5.2 million allegedly owed to NBFC. He claimed that the solicitors for the banks agreed by letter of 19th December, 1997 that Bula was entitled to such setoff . He further claimed that by reason of the payments made of £3,112,667.90 and the suspense account setoff in the region of £4.4 million the debt of £5.2 million to NBFC arising pursuant to my order made on 29th April, 1997 is extinguished and that NBFC owe Bula £2.3 million. If according to the agreement in 1980 that payments by Bula were to be in respect of principal, the principal amount of £2.75 million would have been reduced by the payments of £1,262,235.70 made prior to demand. Mr. Wymes also contended that he had not been given information sought by him concerning certain guarantees and other matters to which he was entitled. He claimed that he cannot verify the accuracy of relevant figures without that information. He contended that the title of the Receiver and right to execute for repayment of principal and interest are all extinguished; that the object of the Receiver’s appointment no longer exists and that he is not entitled to act and should be discharged. He claims the mortgages and debentures should be cancelled and Bula’s assets returned to it with documents of title and other related documents held by the Receiver.

15. The judgment of Carroll J also contains the following passage at p.11:-

“…………he [Mr. Wymes] says he gave careful consideration whether there was any wrongdoing on the part of the Receiver or the banks of which he was then aware or ought to have been aware and which was not the subject of the three sets of proceedings already in existence. He said he could conceive of no such wrongdoing whatever.”

16. The arguments advanced by Mr. Wymes were responded to by the Receiver in his second affidavit which is also referred to in extenso by Carroll J. He set out further details as to various amounts due and payments made prior to and subsequent to demand. He contended that taking the best possible senario as to the plaintiffs’ situation (which was contested by him) was that at best from the point of view of Mr. Wymes there was a balance due to NBFC of £1,394,670.00. The Receiver responded to the various contentions made by Mr. Wymes and an affidavit was also sworn by Mr. Ryan of NBFC confirming that the figures in the Receiver’s grounding and supplemental affidavits are correct. Mr. Wymes responded at length in a second affidavit which gave rise to a third affidavit sworn by the Receiver. In course of the hearing before Carroll J a third affidavit sworn by Mr. Wymes was introduced in evidence. The essence of the foregoing depositions are recited in the judgment of the learned trial judge. She then continued at p. 18 as follows:-

“While the Receiver claims the proceedings should be struck out under Order 19 rule 28 as disclosing no reasonable cause of action and/or as being frivolous or vexatious or alternatively that they should be struck out under the inherent jurisdiction of the Court as an abuse of process or alternatively that the issues could have been (but were not) raised in the Bank Action; the fourth ground is that the proceedings contravene the undertaking of the first, second, fifth and sixth plaintiffs which was given to the Court on the 18th June, 1997.
I propose to deal first with this ground. The Receiver claims that the Statement of Claim contains a number of broad allegations raised in the Bank Action [Bula II]. The proceedings also rely on the limitation argument to contend that the liability to the banks has been extinguished by the Statute of Limitations. It claims the limitation period for NBFC expired in 1992 and claims the NBFC debts have been discharged by certain payments. It is submitted that it is clear the allegation of wrongdoing by the Receiver i.e., his remaining in place when debts have been discharged or extinguished are based on matters which occurred prior to the 18th June, 1997 and Mr. Wymes ought to have been aware of them. If he makes the case that he did not comprehend or appreciate the facts it makes the undertaking meaningless. Bula was aware of the third party claim by Bula Holdings at the time of giving the undertaking.
The claim of wrongful interference with Bula’s contractual interests arises because the Receiver proposes to sell an asset to discharge debts to one set of creditors while Bula contends money is due to another creditor. Bula was aware of the Bula Holdings’ claim when it gave the undertaking, as it was aware that the Receiver was in possession for the purpose of selling.
The third claim concerns the direct sale of the assets as opposed to a sale of shares of the company. This issue was raised in the Bank Action and was covered by the undertaking.
Quite apart from the undertakings, significant portions of the amended Statement of Claim replicate claims in the Bank Action and is res judicata. If claims were not replicated in the Bank Action but could have been litigated in it, Bula is precluded from now doing so on the basis of estoppel by omission.”

17. Carroll J. referred to and commented on the various written submissions furnished on behalf of the plaintiff. She also considered in detail the order made by me on 18th June, 1997 and the nature of the undertakings given by the plaintiffs in Bula II. She continued at p. 23:-

“ It seems to me that the intention of Barr J was to draw a line under the protracted litigation stretching back to 1986. There was to be no more litigation in respect of any alleged wrongdoing of which the plaintiffs were then aware or in the opinion of the Court ought to have been aware in June 1997. [That is precisely what my intention was in providing for the undertakings].
Bula (i.e. Mr. Wymes) seeks to make the case that the Statement of Claim deals with wrongdoing of which he was not aware in June 1997. Mr. Wymes claims that the NBFC is not owed any money because of payments made to principal and because of setoff and the operation of the Statute of Limitations and therefore the Receiver is not now entitled to act. The facts on which this claim is based were known to Bula at the time of the undertaking. Mr. Wymes claims he did not know and ought not to have know that the NBFC debt was extinguished. He claims it was not reasonable that he ought to have adverted to the 1980 letter in relation to the application of payments to capital.
In my opinion the undertaking did not concern failure to advert to something. That would not release him from the undertaking. The undertaking concerned facts known or which ought to have been known to Bula in June 1997. In my opinion Bula either knew or ought to have known those facts on which the present claim to extinguishment of debt are based.
The next wrongdoing which Mr. Wymes says he did not know of was the alleged interference with commercial interests i.e., that Bula Holdings claim would not be paid if the Receiver sold the ore-body. There is nothing new about the Bula Holdings claims. It was known at the time of the undertaking. The ruling also spelt out that the challenge to the Receiver’s right to sell the ore-body must fail if the Supreme Court appeal was unsuccessful.
The next wrongdoing which he said he did not know of was the disregard for tax advantages attached to an asset sale. This cannot be true. This matter was part of the claim made in the Bank Action and raised at paragraph 20 (8) of the revised Statement of Claim. As part of the primary claims in the Bank Action it benefits from the condition that since the Supreme Court appeal has been unsuccessful it should stand dismissed. So much for the argument that these matters arose after the undertaking and were not matters of which the plaintiff knew or ought to have known.
However, Mr. Wymes does not only rely on that argument. He also argues that the action is not “further proceedings” as the proceedings were in existence at the date of the undertaking. I do not accept that the undertaking not to mount further proceedings did not cover the Statement of Claim issued two years later in June 1999 running to 40 paragraphs. It cannot be seriously contended that Barr J intended that the plaintiffs would be free to litigate the claims in the endorsement of claim despite replication in the Bank Action merely because a plenary summons had been issued prior to the undertaking. The only matter which Bula was not precluded from litigating was wrongdoing of which it was not aware or ought not to have been aware.
Bula claims that even if there is a breach of the undertaking the Court has no power to dismiss Bula’s claim. In my opinion the Court under its inherent power must be concerned to ensure that undertakings given to the Court are observed and that justice is done between the parties. The concern of Barr J to do justice involved a finely balanced weighting of the respective rights of the parties. Bula obtained an adjournment on terms. Mr. Wymes is now seeking to go behind those terms. In order to enforce an undertaking given to the Court it is not necessary that contempt or committal proceedings as such have to be brought. The motion by the Receiver is in effect an application to enforce the undertaking. The Court can achieve compliance with the undertaking by simply putting a permanent stay on the action. In my opinion it would be a denial of justice to the defendant to release Bula in any way from the undertakings given.
What I propose to do ……. is to put a permanent stay on the action. It is not necessary to rule on whether Bula was in the first instance entitled to register a lis pendens. The lis pendens must now be removed as the action is gone.
Since the Receiver succeeds on the ground of breach of undertaking it is not necessary to rule on the other grounds put forward in the application”.

18. As already stated, Carroll J concluded her judgment by deciding a further issue of law to which I shall return later in this ruling.

The Points of Claim
19. The plaintiffs’ final re-revised Points of Claim are as set out in the schedule to

the written submissions furnished on their behalf. The new claims which it is sought to include with the outstanding Bula II limitations issues are underlined. Aspects thereof which it was ultimately conceded by Mr. Traynor on behalf of the plaintiffs in course of argument are captured by the judgment of Carroll J supra are crossed out. The paragraphs which are in dispute are Nos. 22, 23, 24, 26, 27, 28, 29, 30, 33 and the claims at (xiii) to (xvii).

THE LAW
20. In deciding whether or not the plaintiffs should be permitted to pursue in Bula II all or any of the foregoing new claims the status of which are challenged by the defendants, there are two aspects of law which are pertinent.

The status, in the context of Bula II, of findings made by Carroll J in the Receiver’s application to strike out Bula’s action which are contained in her judgment delivered on 15th December, 2000 to which I have already referred.
21. The law in that regard was considered by me in this action in the context of the effect of rulings on law and findings of fact made by Lynch J in Bula I and I summarised it in the following passage in my considered ruling delivered on 29th April, 1997 at page 8 as follows:-

“I am satisfied that there are three questions which should be addressed by the Court in determining an issue regarding the status of facts and/or law found by a Court of equal jurisdiction in earlier proceedings. In terms of the instant case; first, are the plaintiffs seeking to reopen in Bula II an issue of fact or law which was decided against them in Bula I? Secondly, was the finding in question necessary to the determination by Lynch J of the issue in Bula I to which it relates? Thirdly, is the finding in question relevant to an issue raised by the plaintiffs in Bula II? These questions comprise the yardstick against which the status of each finding of fact or law made by Lynch J in Bula I must be assessed in determining whether or not it has binding effect in Bula II…..”

22. The status of a prior relevant judgment by a Court of equal jurisdiction was considered by Parke J in Irish Trust Bank -v- Central Bank of Ireland [1976-7] ILRM 50. The judgment contains the following passage at p.53:-

“Mr. O’Neill SC on behalf of the defendants urged me that I should not follow or apply the principles quoted from the judgment of Gannon J. I fully accept that there are occasions in which the principle of stare decisis may be departed from but I consider that these are extremely rare. A Court may depart from a decision of a Court of equal jurisdiction if it appears that such a decision was given in a case in which either insufficient authority was cited or incorrect submissions advanced or in which the nature and wording of the judgment itself reveals that the judge disregarded or misunderstood an important element in the case or the arguments submitted to him or the authority cited or in some other way departed from the proper standard to be adopted in judicial determination…..”

23. I have no doubt that the relevant findings of fact and of law made by Carroll J are four square within the parameters of the judgment of Parke J in Irish Trust Bank -v- Central Bank of Ireland supra and of my ruling in this action to which I have referred.

One of the findings of law made by Carroll J which is particularly challenged on behalf of the plaintiffs is that contained in the final paragraph of her judgment which is in the following terms:-
“Mr. Wymes alleges that the Banks were perpetrating an abuse of the process of the Court by concealing the writs for debt and for well-charging orders from Barr J. I fail to see how the issue of writs to prevent the running of the Statute of Limitations can be classified as an abuse of the process.”

24. I have no difficulty in accepting that proposition which is supported by long-standing well established authorities. See judgment of the Supreme Court in Baulk -v- Irish National Insurance Company [1969] IR 66 and in particular the judgment of Walsh J which is that of the Court. It contains the following passage at p.71:-

“In my view it is erroneous to compare the position of proceedings which have been commenced by the issue of a plenary summons that has not been served within the necessary 12 months with the position where no proceedings have been issued at all. Section 11 sub-s. 2(b), of the Statute of Limitations, 1957 requires that the action in this case be brought before the expiration of 3 years from the date on which the cause of action accrued, but it does not require that the proceedings should be served within that time. If the proceedings, for one reason or another, cannot be served or are not served within that time, then a plaintiff may find himself in a position where he cannot pursue his action and the alternative course of issuing fresh proceedings may be useless to him if more than three years from the date of the cause of action has already elapsed”.

See also Kloeckner -v- Gatoil [1990] 1 Lloyd’s LR 177 . The judgment of Hirst J contains the following passage at p. 204.
“But the other citations and the unanimous view of the textbook writers seem to me to be based on a universal understanding…….. that the critical moment when an action has been brought in this country, and therefore becomes pending, is the moment of the issue of the writ…..”

See also “Limitation of Actions” by Oughton and Others, 1998 edition at p. 81 and “The Limitation of Actions”, second edition, by Brady and Kerr at p.10. It is also of interest that in Order 8 rule 1 of the RSC 1986, which deals with the renewal of summonses, it is provided that
“….a summons so renewed shall remain in force and be available to prevent the operation of any statute whereby a time for the commencement of the action may be limited and for all other purposes from the date of issuing of the original summons”

25. This clearly implies that the efficacy of a plenary summons is not dependent on service and that the issuing of it will stop time running per the Statute of Limitations.

26. The second aspect of law which must be addressed is the proper interpretation of Order 28 of the RSC. Rule 1 thereof is in the following terms:-

“1. 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.”

27. The rule provides that a party may seek to amend his pleadings at any stage of the proceedings and the Court has a discretion to allow or disallow the proposed amendment. It will be noted that in exercising its discretion the primary objective of the Court is to achieve justice between the parties and, subject to that overriding requirement, all amendments shall be authorised as may be necessary for the purpose of determining the real questions in controversy between the parties.

28. In the context of the instant case the overriding requirement of achieving justice between the parties includes the honouring by the plaintiffs of the undertaking given by them which prohibits the introduction of new claims of which they were aware or ought to be have been aware on 18th June, 1997. I regarded that undertaking then, and I continue to regard it now, as being of crucial importance in introducing a fair balance of justice in the conduct of litigation between the parties. If it were ignored by the Court, or not rigorously enforced, I apprehend that in all probability Mr. Wymes would continue orchestrating, as he has done in the past, more and more litigation in pursuit of his huge determination to prevent, or at least postpone indefinitely, the sale of the Bula ore-body. It would be manifestly unjust to allow him to continue manipulating the litigation process in that way and thus frustrating the rights of the defendants. Accordingly, “new claims” must be rigorously examined in the context of the undertakings contained in the order made herein on 18th June, 1997.

29. The foregoing interpretation of Order 28 rule 1 in the context of the introduction of new claims in this action as sought by the plaintiffs is not at variance with the judgments of O’Sullivan J in Cornhill and Others -v- Minister for Agriculture and Food and Others [High Court unreported 13th March, 1998] and Kinlen J in Bell -v- Pederson [1996] 1 ILRM 290 in both of which the importance of achieving justice between the parties is recognised in the context of the Court’s discretion on an application to amend pleadings.

THE NEW CLAIMS – CONCLUSIONS
30. Reviewing the new claims in the re-revised Points of Claim now sought to be litigated in Bula II in the context of the foregoing criteria and principles of law, my conclusions are as follows:-

31. There are five new claims now sought to be added to the limitation issues in Bula II. It is contended that all but one of them are matters which have arisen post 18th June, 1997 and are not within the undertaking given by the plaintiffs on that date regarding the initiation of new claims. The following numbered paragraphs relate to the Points of Claim to which I have referred.

Paragraph 23 raises an issue of law that none of the six sets of proceedings instituted by the respective Banks between April 4th and April 22nd, 1997 specified in paragraph 22 (being actions against Bula claiming monetary judgments or well-charging orders) had the effect of stopping time running against the Banks on foot of the Statute of Limitations, 1957 in consequence of which, inter alia, the defendants’ rights vis- à-vis Bula’s property is extinguished and the Receiver has no authority to sell its assets.
32. The proceedings in question were initiated against Bula on various dates in April, 1997 but had not been served at the time of the plaintiffs undertaking given on 18th June, 1997. There is no evidence to suggest that the plaintiffs had any knowledge of such proceedings on the latter date. I accept that they did not know at the time of their undertaking and could not reasonably have been aware that such proceedings had been instituted against Bula. It follows that the claim pleaded in paragraph 23, being new and not covered by the undertaking, is one the inclusion of which the Court might consider favourably. It is not the function of the Court, on an application to amend pleadings by inclusion of a new claim, to assess the weight of the case in support of the proposed claim. In making its decision it is sufficient that the Court should be satisfied that there is a stateable argument in support of the claim which it is sought to include in the proceedings and that its inclusion would not be unjust to the defendants. I am satisfied that these criteria have been met and that the claim pleaded in paragraph 23, including the alternative claim therein, should be allowed. Likewise paragraph 22, which provides relevant factual information, should be allowed.

Paragraph 24 . This is an alternative plea that the Banks’ 1997 proceedings referred to in paragraph 22 comprised an abuse of process as the reality behind such proceedings was not the prosecuting of claims made therein, but that the sole objective was to stop time under the Statute of Limitations from running. This claim was ruled upon by Carroll J in the final paragraph of her judgment and, as already stated, I regard myself as bound by her finding thereon. I am also satisfied that there is substantial authority in support of her conclusion. Paragraph 24 is disallowed and also paragraph 25 which is ancillary thereto.
Paragraphs 26 and 27 . As stated at 4.8 in p.15 of the plaintiffs’ submissions these new paragraphs as originally drafted pleaded that NBFC could not, in effect, deny a right to such a set-off to Bula in respect of payments made, (including payments made to or held in the suspense accounts), from going to the reduction of any sum found to be due, either as a result of representation, or a course of dealing, or in equity. Having regard to the judgment of Carroll J in Bula’s action against the Receiver the plaintiffs now concede that they may not base any such claim upon either a representation or a course of dealing (both of which would relate to the period prior to June 1997), and have deleted and amended their new claim accordingly as already stated herein.
33. It is submitted on behalf of the plaintiffs that if any of the Banks should be found to be entitled to the recovery of their principal monies, that their consequent interest claims should be limited to six years arrears of interest (as opposed to arrears of interest going back to the late 1970’s). The plaintiffs wish to argue that Bula and the guarantors are entitled to require the Banks to offset as against whatever sum (if any) should ultimately be found to be due and owing to NBFC by Bula the monies held by NBFC in their suspense accounts. It is further contended that any reduction in the principal monies continuing to be owed by Bula to NBFC would also result in a consequent reduction in the calculation of interest payable so as to cause the total figure of six years arrears of interest together with the surviving principal monies to reduce to such a figure as might be capable of repayment or extinguishment by the suspense account monies. It is submitted that the proposed amendment in relation to the NBFC suspense accounts should be allowed on each of four different grounds:-

Because it is an up-to-date pleading not previously available. It is contended that a plea to the effect that the NBFC suspense accounts alone and in their own right could exceed any sum which might be due to NBFC was not a plea which was capable of being made in 1997 when the suspense account monies of NBFC were calculated roughly at £4 million inclusive of interest.
Because the debt owed to NBFC pursuant to the April 1997 ruling, after taking account of the suspense account set-off, was left in abeyance to be argued at the resumed trial. It is submitted that that is what was clearly indicated to the Court on behalf of the plaintiffs at the time of the adjournment in 1997 and the defendants did not seek to contest that understanding. Transcript extracts are referred to which appear to bear that out. It is urged on behalf of the plaintiffs that, although reference to the effect of the suspense accounts on the NBFC claim is sought to be inserted expressly as a new claim in paragraph 26, it is in fact a matter that remained over to be dealt with as part of the original proceedings before the Court at the time of the adjournment in 1997.
Because the issue as to whether any debt remained owing to NBFC (and thus the relevance of the NBFC suspense accounts) was relevant to the original Points of Claim and Defences before the Court in April 1997.
Because the amount of any debt owing to NBFC by Bula and the guarantors is currently a matter at issue between the parties.
34. The essence of the difficulty facing the plaintiffs regarding the inclusion of new claims relating to the NBFC suspense accounts is summarised in the submissions on behalf of the Banks at pp. 8 – 11 as follows:-

“[the claim at paragraph 26] is wholly unconnected with the Statute of Limitations. It is a new claim sought to be pleaded. For the reasons already identified and those below it must be refused.
It is also a claim which is unstateable. The law in relation to suspense account payments is clear and admitted to be so by counsel for the plaintiffs.
The legal proposition so far as the Banks are concerned, is that where guarantees are “all sums due” guarantees as all the guarantees are, and where monies are realised on foot of those guarantees the monies so realised do not require to be taken into account in any claim by the Banks against their debtor, Bula Limited.”

35. Counsel for the plaintiffs concede that this is the correct legal position.

“For the avoidance of any doubt that this is so, it is to be seen in the extract from the Law of Guarantees by Andrews and Millett, Second edition cited at paragraph 13 (10) which states that Guarantees may contain a suspense account clause which entitles the creditor to keep separate any payment made by the surety until the creditor has received all that is due to him from the principal. The effect of these clauses is that the creditor is not obliged to give credit, in proving in the principal’s insolvency, for any amounts received from the surety, unless the creditors appropriate these payments to the principal debt which is not alleged to have occurred.
The guarantees in favour of AIIB and UIB both contain clauses which provide that any sum paid by the guarantors to the Banks may be deposited to a suspense account, see clause 10 in the AIIB Guarantees and clause 7 in the UIB Guarantees. In respect of NBFC the guarantee is silent on this point but the law, regardless of the terms of the Guarantee, provides for exactly the same treatment. See Ulster Bank Limited -v- Lambe [1966] NILR p.161 in which Lowry J analysed the law noting that a creditor was entitled to pursue the debtor for the full amount of the borrowing without taking account of sums from Guarantors held in suspense accounts where, as in the case here, the guarantees were “all sums guarantees” although containing a monetary limit. He noted at p. 169 of his judgment that
“the true principle is that where the entire debt is guaranteed, with or without a limit, the creditor can sue the principal debtor, or claim in his bankruptcy, to the full amount of the debt, despite any payments on foot of the guarantee whether they are made before or after the principal debtor’s bankruptcy, provided those payments in the aggregate fall short of the full amount of the debt”

The judge also noted that the benefit to the guarantor is that money recovered in excess of the full amount of the debt is held in trust for the guarantor.
An exhaustive analysis of the law is to be seen in the decision of the Supreme Court of Victoria in Westpac Banking Corporation -v- Gollin 1987 Vic Lexis 419 [1988] VRP 397. Tagell J exhaustively reviewing the case law on the topic noting the principle summarised in Re Sass was applied in Ulster Bank Limited -v- Lambe [1966] NI 161. He also notes that the Ulster Bank case did not involve a claim in bankruptcy but that the facts were otherwise similar to those in Re Sass and that the Bank was entitled to sue for the whole debt having placed realisations on security in a suspense account. Tagell J also noted that Lowry J held that the Bank was entitled to succeed in the whole claim, notwithstanding the payment by the sureity. He quoted with approval the extract in Ulster Bank -v- Lambe noted above.
It is noteworthy that no attempt was made by the plaintiffs, in moving their adjournment application, to offer any principle of law that would support the amended pleadings in respect of the suspense accounts. Or any claims concerning the suspense accounts and the treatment of the money therein. At its height the plaintiffs allege that if the money in the suspense accounts had interest added to it and if they succeeded in limiting the amounts which the Banks could now recover, that possibly this would have the effect of greatly reducing what is now recoverable by the Banks. It is wholly unnecessary for any new issue to be added to these proceedings to allow that view to be formed if it be an appropriate view, which is not admitted. The effect of a determination of the outstanding Statute of Limitation points identified above will give all material necessary to understanding what is due to the Banks. It will be a simple mathematical calculation. It is not the role and/or appropriate that the Courts should be asked to effect what is in principle an accounting exercise. It is wholly inappropriate that the Court should be troubled by hearing any evidence on what interest would have accrued if the suspense accounts were to be treated as interest bearing accounts. It seems to have wholly escaped the plaintiffs that if the suspense accounts are to bear interest, the quid pro quo is that the monies which remain outstanding also bear interest. It is undoubtedly the fact that the difference between two interest rates one being a deposit rate, the other being a borrowing rate would always be in favour of the banks…..”

36. A similar argument has been advanced in submissions furnished on behalf of the Receiver . The following passage occurs at pp. 11/12 under a heading “THE SUSPENSE ACCOUNTS CLAIMS”:

“A Party to an action will not be permitted to amend his pleadings so as to include a claim which must fail (see Supreme Court Practice 1988 edition para. 20/5-8/23). The contention advanced by the plaintiffs to the effect that the debt owing by the plaintiffs to the Banks must be reduced to reflect monies collected from guarantors and maintained in suspense accounts is a claim that must fail. The law is clear; a creditor is free to keep monies collected from guarantors in suspense accounts without reducing the liability of the creditor, (although clearly the liability of the guarantor as against the creditor must be reduced accordingly). The creditor remains free to prove as against the primary debtor for the full amount – see Goode Legal Problems of Credit and Security (second edition 1988) pp. 196-197; Ulster Bank -v- Lambe [1968] NI 161 . This principle is in aid of the guarantor. It means that even if the plaintiffs can sustain the actual basis of their claim, this does not affect the legal right of the banks to recover the full amounts from Bula, giving credit to guarantors accordingly….”

37. In the light of the foregoing it seem to be well established that the argument sought to be advanced on behalf of the plaintiffs regarding the suspense accounts is untenable in Irish law and must fail. In short, the plaintiffs have failed to show that there is a statable argument in support of the new claim they wish to include as to the suspense accounts and I refuse their application in that regard.

38. There is also another aspect to the new claim contained in paragraph 26. It pleads the right to pray in aid the benefit of any other payments received by NBFC “….. on foot or as a result of …..” the personal guarantees. This proposed amendment refers generally to amounts received or payments to the benefit of Bula by any other party or the guarantors, including the Roches, or on foot of or as a result of the guarantees of the Roches.

39. This opens up a contention made by Mr. Wymes based on anecdotal hearsay evidence furnished to him by his daughter, Elizabeth Dillon, which is referred to in an Affidavit sworn by her on 24th January, 2001 . It contains the following averments:-

In or about September 1997 (I cannot at this stage recall the date), I was told by my mother, Eleanor Wymes, spontaneously during the course of a conversation that I had with her at that time, that she and her other sisters, Maura Tierney and Claire Fleming (all three being sisters of Thomas J. Roche, the fourth named plaintiff in the above entitled proceedings and daughters of Thomas C. Roche, the third named plaintiff in the above entitled proceedings), were going to receive a sum of money from Thomas J. Roche, the amount of which was going to be dictated by the value of a back field at their father’s property “Chesterfield”, Blackrock, Co. Dublin.
I was surprised when I heard of this from my mother, because it was my understanding that “Chesterfield”, the property of my grandfather, Thomas C. Roche, had been mortgaged to the Northern Bank Group as collateral security in respect of the debts of Bula Limited in connection with the ore-body at Navan. In those circumstances, I asked my mother how it was that my uncle, Thomas J. Roche , would be able to make such a payment in circumstances where the property in question was mortgaged.
When I asked my mother this question she replied that her sister, Maura Tierney, had told her that Ann Doyle, wife of Thomas J. Roche had done a deal with the Banks. My recollection is that my mother’s understanding was that this involved Ann Doyle using her money; i.e., not Roche money. She told me that, as a result of this, the Roches had got their houses back from the Banks. The said Ann Doyle is a daughter of the late and well known hotelier, P V Doyle.
I was well aware that my father, the said Michael Wymes, was deeply involved in litigation at the time connected with the Bula ore-body and I was also aware that Thomas C. Roche and Thomas J. Roche had themselves brought proceedings against my father and Mr. Wood in connection with Bula Holdings. I therefore believed that the information that I had received from my mother would be likely to be significant, and I subsequently telephoned my father and met him shortly afterwards by agreement in Dunshaughlin…… where I informed him of these matters”

40. Certain conclusions may be drawn from Kathleen Dillon’s deposition:-

It is reasonable to assume that the information deposed to is accurately stated by her. The bona fides of the deponent is not in controversy.
At its high water mark from Mr. Wymes’s point of view the information indicates that after the death of Mr. Thomas C. Roche, Mrs. Ann Roche (nee Doyle), wife of Thomas J. Roche, made some payment (perhaps from Doyle family funds) to the Banks which may have released certain Roche family property which had been mortgaged to the Banks as part of the Roche guarantees of Bula.
41. Whether or not the Banks may have accepted a cash deposit or other form of security from Mrs. Ann Roche in lieu of lands mortgaged by the Roche guarantors or either of them does not affect the liability of Bula to the Banks or the liability of Mr. Wymes or Mr. Wood on foot of their guarantees. The alleged arrangement, if any, what ever it might have been is irrelevant to the limitation issues with which I am concerned. The claims in paragraphs 26 and 27 are disallowed.

NEW PARAGRAPHS 28 AND 29 .
42. The claims referred to therein concern Mr. Wood’s suspense account with AIIB. The argument advanced in support of the claim in the plaintiffs’ submissions at pp. 16/19 is as follows:-

“These paragraphs relate to the securities realised by AIIB on 31st August, 1985 which were furnished on behalf of Mr. Wood, and which have been held by AIIB on a suspense account basis. The issue of whether or not the claims of AIIB are statute barred in respect of both their principal and interest remained a live issue when these proceedings adjourned in June 1997, and in the event that this Court should hold that the claims of AIIB are indeed statute barred and extinguished, the case that the plaintiffs would wish to make is that, in consequence of such a ruling, Mr. Wood would thereupon become entitled to the release to him of the AIIB suspense account monies, which he in turn would then be free to cause to be applied to extinguish any surviving NBFC or UIB debt.
There was no claim or reference whatsoever in the 1999 Statement of Claim in the Carroll proceedings to AIIB suspense account monies. The AIIB suspense accounts were not referred to at all in the judgment of Carroll J and there are no findings by her in relation thereto. Accordingly, it is submitted that the pleadings proposed at New Paragraphs 28 and 29 in relation to the AIIB suspense account are not affected or caught by the judgment of Carroll J.
As is contended at paragraphs 136 – 138 of Mr. Wymes’s affidavit of January 5th last, AIIB had on 31st August, 1985 caused shares in CRH Plc owned by Mr. Wood and given as security to AIIB on foot of his guarantee of Bula’s debt, to be realised into a cash amount of £1,190,012.00, which (with accrued interest thereon) had grown to the sum of £2,845,375.16 by 10th January, 1994. The said monies are available, in the event that the AIIB claim is found to be statute barred, to meet any amount found by this Honourable Court to be due to any of the other Banks…….
In the circumstances, it is submitted that the New Paragraphs 28 and 29 sought to be added to these proceedings do no more than plead the logical consequence that, in the event that the AIIB claim should ultimately be found to be statute barred, then Mr. Wood should be entitled to have the return of those AIIB securities and, in turn, be entitled to direct their application towards the extinguishment of any surviving NBFC claim. This is particularly so having regard to the fact that the AIIB suspense accounts holding the cash value of Mr. Wood’s realised securities will have continued to have had interest added to them from 1997 to date. It is believed by the plaintiffs that the total present day value in 2001 of the AIIB suspense accounts is with interest likely to be in excess of £4 million alone.
In these circumstances, it is submitted that it is appropriate that the new intended claim by the plaintiffs in respect of the AIIB suspense account monies is an appropriate new claim to be added to these proceedings. Indeed, even without the proposed amendment, it is submitted that the existence of these AIIB suspense account monies was always going to be a relevant issue that would have to be taken into account in determining the final outcome of these proceedings, regardless of whether the matter was included expressly in the Points of Claim. However, for the purposes of identifying the significance of the AIIB suspense account monies as a matter particularly at issue in these proceedings, it is submitted that New Paragraphs 28 and 29 are appropriate new additions that should be added to these proceedings.
On the question as to whether or not such claims relating to the AIIB suspense accounts existed in 1997, the plaintiffs submit that all that NBFC will be entitled to recover from Bula Limited will be any outstanding principal monies plus 6 years arrears of interest. That will necessarily be a fixed sum to be calculated in 2001. However, if the AIIB debt has indeed been extinguished, then Mr. Wood would become entitled to the release of all his AIIB suspense account monies, together with all interest which will have accrued thereon. Thus, the full value of Mr. Wood’s set-off entitlement, and the full effect of applying that set-off against whatever surviving NBFC debt should be found to be due in this matter, is something that can only fall to be assessed now, in 2001, and the effect of the same can only be assessed now, in 2001, and could therefore not have been a claim available in 1997 or, alternatively, could not have been available to the same extent as now”

43. The response of the Banks is set out at p.11 of their submissions as follows.

“For the reasons already identified this is again a new claim, unconnected with the remaining Statute of Limitations [issues] which cannot be joined given the terms of the order made in 1997. In addition the joinder would be unjust to the defendants. It is also based on an assertion of law that is untenable, i.e., the suspense account treatment issues dealt with above”

44. In considering whether or not to allow the inclusion of the claims at paragraphs 28 and 29 it is important to bear in mind that it is a claim which is being advanced specifically on behalf of Mr. Wood, a party to this action. The issue which arises is in my opinion quite different to that relating to the other suspense accounts. Mr. Wood is entitled to know where he stands vis- à-vis the AIIB suspense account and to make such decisions in that regard as may be open to him when all relevant facts have been revealed and it has been decided whether or not the AIIB debt is statute barred. It is urged on his behalf and on behalf of Mr. Wymes that the end result could have an important bearing on the ultimate indebtedness (if any) of Bula to the Banks and the right of the Receiver to sell the ore-body. It seems to me that a stateable argument has been advanced supporting the inclusion of paragraphs 28 and 29. I also allow the additional wording included in paragraph 30 which is related to paragraphs 28 and 29.

NEW PARAGRAPH 33 .
45. It is explained in the plaintiffs’ submissions that this proposed amendment deals with arrangements concerning the past, present or future legal and/or beneficial ownership of securities under two separate headings, namely:

The mortgages/charges granted by Bula to the three Banks over its minerals and lands at Navan (paragraph 4 of the Points of Claim) and
the personal guarantees of the individual guarantors to the three Banks in respect of the monies lent by the three Banks to Bula (paragraph 7 of the Points of Claim).
46. Mr. Ryan on behalf of NBFC has sworn two recent affidavits dealing with the issue raised in paragraph 33. It is contended in the plaintiffs’ submissions at pp.22 et seq.

“in his affidavit sworn on behalf of NBFC on 25th January, 2001, Mr. Ryan confined himself to simply denying that there has been a change of ownership or transfer implemented of the actual mortgages/charges/securities granted by the guarantors pursuant to or under the guarantees. Critically, he makes no reference to the actual guarantees given and executed by the guarantors, or to the arrangements touching upon or concerning the past, present or future legal and/or beneficial ownership of the said actual mortgages. This is a change of ownership referred to in, and sought to be included in, the proposed amendment and not the mortgages backing the guarantees. Further, in averring that no change has been implemented to the mortgages, he failed to deal with arrangements touching upon or concerning (as distinct from the actual implementation of a change of ownership/transfer) the past and present legal and/or beneficial ownership, and also totally ignores arrangements touching upon or concerning the future legal and/or beneficial ownership of the mortgages/charges/ securities granted by the guarantors to NBFC….”
47. The plaintiffs submission on paragraph 33 concludes with the following summary of their argument:-

“Because of the complete absence of any affidavit from UIB or AIIB in this matter, and also because of the absence from NBFC of an averment in the terms of the proposed amendment (i.e., that no arrangements have been entered into touching upon the past, present or future legal and/or beneficial ownership of the actual guarantees themselves from the individual guarantors) and because of the clear omissions and deficiencies in Mr. Ryan’s affidavit…. it is submitted that the proposed amendment should be allowed”.

48. The Banks’ response is contained in the following passage from their submissions at pp.11/12.

“Paragraph 33 of the redelivered Points of Claim contends for arrangements concerning the beneficial ownership of the securities which have disentitled the Banks from claiming against Bula or the guarantors.
This is again a brand new claim, unconnected with the Statute of Limitations. It also suffers from the defect of being advanced as a supposition. The Banks have sworn, without contradiction, that there had been no change in ownership of the securities and no arrangements have been come to as alleged. The attempts to suggest otherwise do not bear examination.
The criticism of the Banks and the manner in which they dealt with this assertion is entirely unjustified. When Mr. Gerard Ryan of NBFC swore that no arrangement had been made, an attempt was made to criticise his affidavit. It is, however, clear from the sworn testimony of Mr. Wymes, in the Carroll J judgment, that his complaints about payments on foot of guarantees were raised against NBFC. In a last minute affidavit the word “Banks” is used. Mr. Hayes has answered for the Banks in his affidavits, on behalf of all banks, saying that no arrangements have been made. Mr. Ryan has sworn a further affidavit. There is nothing left to say.
It is also noteworthy that in relation to suspense account payments, the suspense accounts themselves and all documentation have been discovered to the plaintiffs as long ago as the discrete discovery made before the time the Statute of Limitations issue came on for hearing in 1997 and that statements of account have been sworn to on behalf of the Banks by Mr. Hayes in one of his affidavits detailing the accrual of principal and interest on the basis that suspense account monies do not have to be deducted from the principal and on the basis that the monies have to be so deducted. In the circumstances there can be no basis upon which claims should now be allowed in relation to the suspense account monies. Nothing new has occurred and no reason has been advanced as to why these claims should be introduced now”

49. The application to include paragraph 33 in the Points of Claim is dealt with as follows in the Receiver’s submissions at pp.12/13.

“Not merely is it the case that the plaintiffs have failed to advance any legal basis for the assertion that in some sense the entering into arrangements of the nature alleged in the amended Points of Claim furnishes a basis for the relief sought to be grounded thereon, but the plea set forth in paragraph 33 of the proposed amended Points of Claim is bad in law as lacking particularity. This is not merely a point of pleading; it reflect the more fundamental problem facing the plaintiffs that they have no idea what the arrangements of which they seek to complain actually are.
Before a Court facilitates a party in the amendment of its pleadings, it must be satisfied that there is some prima facie basis for the claim sought to be made….
A party may not introduce a general allegation in the hope that through the process of discovery it will secure sufficient information to enable it to subsequently properly plead and sustain its claim (See Galvin -v- Graham Toomey [1984] 2 ILRM 315). Not merely is it the case that here the plaintiffs have proven themselves unable to adduce anything approaching cogent evidence of the claims which they wish to make, but the evidence before the Court is clearly and unequivocally to the effect that no arrangements of the nature sought to be alleged have been entered into. In these circumstance, it is submitted that the plaintiffs cannot be permitted to amend their claim in the manner they have sought to do”.

50. Weighing up the foregoing arguments advanced on either side, I am satisfied that the plaintiffs have failed to show that there is a stateable case in support of their contention that the claims pleaded in paragraph 33 should be included in the Points of Claim. In particular, I regard the criticism of Mr. Ryan’s affidavits as being unreal. Accordingly, the inclusion of paragraph 33 is refused.

THE PLAINTIFFS’ AMENDED CLAIM .
51. The new claims at (xiii) and (xvii) are approved, but I am not prepared to allow the claims specified at (xiv), (xv) and (xvi). Apart from the claims refereed to herein which I have ruled out, the remainder of the Points of Claim is acceptable and, with the defendants’ defence thereto, will constitute the parameters of the remaining issues outstanding in this action.

FURTHER DISCOVERY
52. I am satisfied that the remaining Statute of Limitations issues are essentially matters of law in relation to which no further discovery of documents is required. However, it is proper that there should be up-to-date discovery relating to the suspense accounts held by NBFC and AIIB in connection with Mr. Wood and any company controlled by him .