THE HIGH COURT
1996 No. 292 COS CT5

IN THE MATTER OF JOHN ATKINS AND COMPANY LIMITED AND IN THE MATTER OF THE COMPANIES ACTS 1963 - 1990

BETWEEN

MARTIN WOLFE AND RUTH WOLFE
PETITIONERS

PETER WOLFE, ANGELA WOLFE, RANGER HOLDINGS LIMITED AND JOHN ATKINS AND COMPANY LIMITED
RESPONDENTS
JUDGMENT OF Mr Justice Herbert delivered the 28th day of July, 2000.

Following upon the judgment of this Court delivered on the 29th June 2000, a Notice of Motion was filed dated 3rd July 2000 on behalf of the Petitioners, Martin Wolfe and Ruth Wolfe, seeking liberty of the Court to re-amend the amended Petition heretofore delivered in this case.

Order 28 Rule 1 of the Rules of the Superior Courts, 1986, 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 amendments shall be made as may be necessary for the purpose of determining the real question in controversy between the parties”.

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Order 125 Rule 1 of the Rules of the Superior Courts, 1986, defines, “Pleading” has including a petition, and there is nothing in Order 28 Rule 1 of the same Rules which would render such inclusion repugnant to its operation.

There can be no question but that the re-amendment sought in this case is in the words of Morris P., in the case of Rubotham (infant) -v- M & B Bakeries Limited [1993] ILRM 219 at 221,

“Fundamental and introduces into the action a Claim for a relief which has not originally been made.”

In my judgment in the absence of some special circumstances, as where the party opposing the amendment has rights existing at the date of the application to the Court, such as the benefit of the Statute of Limitations, which would be thereby prejudiced, the mere novelty of the proposed re-amendment does not represent a barrier to its being permitted by the Courts. I adopt the following passage from the judgment of Morris P. in the case of Rubotham (infant) versus M & B Bakeries Limited, (above cited)

“since Order 28 Rule 1 of the Superior Courts Rules, envisages the making of an amendment which may be necessary ‘for the purpose of determining the real questions in controversy’, it appears to me that the fact that this may be a new and hitherto unpleaded case is not a bar to granting an amendment”.

I have reached the conclusion that the re-amendment sought by the petitioners is necessary in the interest of justice and for the purpose of ensuring that what are very

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obviously the real and principal questions in controversy between the parties are before the Court. In reaching this conclusion I am satisfied that any prejudice suffered by the Respondents will be remedied by the adjourned of the trial, an Order for costs and the imposition of a condition that the Petitioners shall forthwith furnish to the Respondents an indemnity against all extra costs and expenses which may reasonably be incurred by the Respondents in dealing with the re-amendment. (DPP -v- Corbett [1992] ILRM 674 at 678, per Lynch J, adopted by Kinlen J in Bell -v- Pederson and Sandoz Ringaskiddy Limited [1995] 3 IR 511 at 518 and 519).

The Court will permit the delivery of a re-amended petition in the form annexed to the aforementioned Notice of Motion provided that:

1.	The “particulars” proposed to be inserted into paragraph 11 thereof shall in lieu be pleaded as a separate and distinct basis of claim.

2.	The “particulars” proposed to be inserted into paragraph 12 thereof shall in lieu be pleaded as a separate and distinct basis of claim and in the following manner: -

(a)	the proposed sub paragraphs 12 (3) and 12 (5) shall be conjoined so as to become one paragraph to be numbered 13.

(b)	the proposed sub paragraphs 12(1) 12(2) 12(4) shall be included in the said paragraph 13 by way of particulars.

3.	The paragraphs now numbered 13a and 13b in the proposed re-amended petition shall be re-numbered so that each shall bear a unique sequential number.

4.	The paragraphs of the proposed re-amended petition shall be re-numbered to take account of the foregoing directions.

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The re-amended petition shall be indorsed as provided by Order 28 Rule 9 of the Rules of the Superior Courts, 1986, and each re-amendment shall be signified by underlining with two parallel horizontal red lines.

Counsel for the first and second named Respondents and Counsel for the third named Respondents did not oppose the application by the petitioners to re-amend the petition, but made the case that the petitioners should not be permitted to amend without paying not only the costs of the re-amendment and undertaking to pay any costs incurred by the Respondents consequent upon the re-amendment, but also all costs incurred by the Respondents and thrown away up to the date of the adjournment of the proceedings which adjournment was rendered necessary by the re-amendment. They argued that having regard the terms of Order 28 Rule 1 of the Rules of the Superior Courts, 1986, the necessity for the Court to hold the balance of justice fairly between the parties meant that without such an Order in favour of the Respondents the Court was in effect prohibited from granting the relief sought by the Petitioners.

I prefer to be guided by the dictum of Murphy J., (Barrington J., concurring), in the course of his judgment in Aer Rianta International CPT -v- Walsh Western International Limited [1997] 2 ILRM 45 at 51 where he held that:-
“If Justice requires that the amendment be allowed it likewise requires that all costs and expenses caused thereby should be borne by the Defendant,” (in that case the party seeking leave to amend),

In the course of determining what would be the appropriate Order for costs to be made in this case I have considered a number of decisions in this jurisdiction and in England.

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The case of Fahy -v- PuIlen 102 ILTR 81 was an action for personal injuries arising from a road traffic accident. In replies to particulars arising out of the statement of claim the Plaintiff claimed that for her to move her right arm caused severe pain from her shoulder to the insertion of the deltoid. In giving evidence as the first witness before a judge sitting with a jury she said in reply to a question from her Counsel that she had pain and discomfort the whole time in both arms and both elbows particularly in the left elbow. The trial judge, (Mr Justice Henchy), on application by Counsel for the Defendant, did not consider that the jury could properly be told to exclude this evidence, which he ruled inadmissible, as to pain and discomfort in the Plaintiff’s left arm and elbow. The jury was discharged and the trial was adjourned. The Defendant was awarded, 
“the costs of and incident to this Order which will be thrown away in consequence of this adjournment.”

The Plaintiff appealed to the Supreme Court. The Supreme Court allowed the Plaintiff’s appeal. In his judgment, Ó Dálaigh C.J, held:-

 (1)	that no amendment of the pleading was necessary, but that had such an amendment been necessary circumstances might have been different,

(2)	that the Defendants could not have been taken by surprise because on an examination by the Defendant’s medical expert of the Plaintiff a week before the trial she had told him and he had recorded that both arms were disabled and were causing pain,

(3)	that the general words used in the replies to particulars were sufficiently apt to embrace the evidence to which objection was taken.

The Court directed that the Defendants should bear the costs of the adjournment of the action, such costs to be on the basis of “costs of the day” as defined by

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Order 99 Rule 37 (33) of the then Rules of the Superior Courts, replaced as of the 1st of October 1986 by Order 99 Rule 37 (33) of the Rules of the Superior Courts 1986.

In the case of O’Driscoll -v-Irish Shell and BP Limited [1968] IR 215, an additional injury to the Plaintiff had become apparent after pleadings were closed. Though the Defendant’s medical expert had noted the contraction of the Plaintiff’s index finger in an examination carried out after the close of pleadings, no notice of additional injury was served by the Plaintiff on the Defendants. The jury was discharged and the trial was adjourned when Counsel for the Plaintiff mentioned this injury in his opening of the case. Dismissing the Plaintiff’s appeal and referring to the decision in Fahy -v- Pullen , (above cited) the Supreme Court (Mr Justice Walsh), held that 
“the correct order for costs in such circumstances is an Order of costs of the day and not an Order for costs thrown away.”

In the case of Kielthy -v- Ascon Limited [1970] IR 122, the Plaintiff was awarded the costs of a three day trial to include costs of a day when the trial had to be adjourned because the foreman of the jury through a misunderstanding failed to attend and Counsel for the Defendants was unwilling to proceed in his absence. Dismissing the Defendants’ appeal to the Supreme Court, Ó Dálaigh C. J, held that the Plaintiff was entitled,
“in addition to the general costs of the trial, to have the costs which were thrown away because of the adjournment which occurred on the second day of the trial”.

“Costs of the day” have been defined as meaning, “all costs incurred, and which will be thrown away in consequence of the slip”. (Bourgoine -v- Taylor (1878) 47 LJCH 542 at 543 per Jessell L.J.) Order 99 Rule 37 (33) of the Rules of the Superior Courts, 1986, provides as follows;-

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“Where a cause being in the list for hearing is ordered to be adjourned upon payment of costs of the day, the party to pay the same shall pay to each party to whom costs are awarded if entitled to appear by three Counsel £180, if by two Counsel £110, and if by one Counsel £70 unless the Court shall otherwise direct. The foregoing sums do not include witnesses’ expenses”.

None of the considerations outlined by Ó Dálaigh C.J. in Fahy -v- Pullen (above cited) arise in the present case. The Respondents are now faced with having to prepare for and to meet what is substantially a new case raising new issues of fact and new and very complex issues of law. An Order for costs of the day in favour of the Respondents as defined by Order 99 Rule 37(33) of the Rules of the Superior Courts 1986 would not in my judgment be sufficient in this case, “for the attainment of justice or for enforcing or defending the rights of the Respondents”.

In the case of Ascherberg, Hopwood and Crew Limited -v- Casa Musicale Sonzogno di Piero Ostali Societa in Nome Collettivo and Others [1971] 3 All ER 38, the trial was adjourned after three days of hearings and the Applicants were permitted, (notwithstanding the opposition of the Plaintiff and the first named Defendant, the other Defendant, not being present or represented), to further re-amend their defence in order to adduce expert evidence that in Italian law certain terms of art in Italian agreements, translations of which had been agreed between the parties, had a special meaning and as to the general state of Italian Copyright Law. In permitting the amendment Ungoed-Thomas J., imposed a number of terms, one of which was as follows;-
“The Applicants shall bear their own costs of the amendment and pay to the other parties in any event their costs of their consequential amendments

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and their costs thrown away by the adjournment, such other party’s costs to be as between party and party and such other parties are to be at liberty to proceed forthwith with the taxation of such costs but not for their payment”.

In the Court of Appeal the Applicant’s argument against this condition is set out in the judgment of Russell L.J, at page 42 of the Report as follows:-
“They say that while it would be right that they should pay the costs of and occasioned by their amendment and perhaps any costs that have been incurred by the other parties with an eye to the trial taking place at or near the fixed date they should not have to pay in any event the costs of the three day hearing. They say to us that the proper order as to those costs should have been either that all costs should have been costs in the cause, or reserved, or that no Order should have being made.”

The Court of Appeal (Russell, Karminski, L.J.J., and Sir Gordon Willmer), rejected this argument and confirmed the Order of the trial judge. In the course of their Judgments, Russell, L.J, and Karminski L.J, referred, but in a different context, to the decision in E.M. Bowden’s Patent Syndicate Limited -v- Herbert Smith and Company (1904) 2 CH 86 and 122, where the Plaintiff as the equitable owner of a patent was given liberty to amend its pleading by joining the legal owner, (failing which the Plaintiff’s case would have been dismissed), but on terms that the Plaintiff paid the Defendant’s costs of the two days of hearing up to that point.

In my judgment the facts of the present case are significantly different from those in Fahy -v- Pullen (above cited), and O’Driscoll -v- Irish Shell and BP Limited (above

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cited). As is apparent from the re-amended petition a number of the matters in issue between the parties at the adjourned hearing will remain issues at the next hearing. However, for this Court to allow only, “costs of the day”, as described in Flynn and Halpin, “Taxation of Costs” (1999), pages 130 and 137, would be to fail to recognise the substance and fundamental importance of the re-amendment, the time and circumstances at and under which the re-amendment came to be sought and the probable impact of the re-amendment on the future course and conduct of the proceedings. On the other hand to allow costs to the Respondents on a full party and party basis as if the petition had been discontinued or had been fully heard and determined in favour of the Respondents would in my judgment be unjust and oppressive to the Petitioners.

What in my judgment will do justice between the parties is an Order for costs in favour of the Respondents on a party and party basis but confined to Counsels’ fees, witnesses’ allowances and expenses, the Solicitor’s proper charges for attending in Court and such other fees disbursements and charges as relate solely to the preparation of the adjourned trial and which will require to be repeated or will be of no value at the next hearing. The amendments made to the petition are so material that it is virtually certain that even should the same Counsel remain on in the matter they will nonetheless have to newly prepare the case and on this basis I consider it reasonable to allow brief fees to Counsel for the Respondents and in addition four only refreshers to Counsel for the first and second named Respondents and one only refresher to Counsel for the third named Respondents.

The Respondents are also to be entitled to the costs of taking this Judgment and the costs of taking the Judgment of the Court delivered on the 29th June 2000. They are also to have the costs of the Motion to re-amend the Petition and all costs and expenses of their consequential amendments. The Petitioners shall forthwith furnish to the Respondents an indemnity in respect of these latter costs.

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It was urged upon me by the Respondents that I should as a condition of permitting the Petitioners to re-amend their Petition and proceed with this action require the Petitioners to give security for whatever costs the Court might award against the Petitioners or alternatively that I should not alone permit the Respondents to proceed forthwith with the taxation of those costs but should also grant liberty to them to seek payment of those costs as soon as taxed and make such payment a condition of the Petitioners proceeding further with this action.

At page 137 of Flynn and Halpin, “Taxation of Costs”, the authors referring to, costs of the day” and “costs thrown away” and citing Greenslade, “On Costs”, p.1 25 (1993) REL 3, state that:-
“Such costs will not usually be recoverable until the conclusion of the case or matter, but the circumstances may well justify an order for “costs thrown away to be taxed and paid” which will entitle the party in whose favour the order is made to have his bill taxed immediately”.

An order for security for the costs awarded was made by the trial judge in the case of Ascherberg Hopwood -v- Casa Musicale, (above cited). The purpose of this order was described by Russell L.J. In the Court of Appeal as being

“To safeguard those other parties as to their costs thrown away by the adjournment, which as I have said, had been ordered to be taxed but not to be immediately paid. It was in effect a sort of substitute for an order for immediate payment.”

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(Page 43). The learned Lord Justice went on to say:-

“The way I look at it for myself is this: that if it is otherwise -as I think it is,- a proper case for the Judge in his discretion to order security for these costs, then it is for the Applicants - who ultimately will have to pay the costs - to satisfy the Court that such security is unnecessary because the other party is already secured in that he has funds of the Applicants in his hands or will shortly have such funds in his hands.”

In the case of Stanley -v- Aer Lingus TEO 114 ILTR 26, a Plenary Summons and a Statement of Claim were delivered on the 16th June 1971 claming damages for personal injuries suffered by the Plaintiff while an aircraft was in flight. The claim was based on the provisions of Section 21 of the Air Navigation and Transport Act, 1936. The Defence delivered on the 6th October 1971 pleaded inter alia that the Statement of Claim disclosed no cause of action as Section 21 of the Act did not apply in the circumstances. On the 18th February 1972 the Plaintiff asked the Defendants by letter to agree to have the erroneous reference to Section 21 deleted but the Defendants refused. Notwithstanding this refusal and the pleading in the Defence nothing further was done by the Plaintiff and the case was set down for trial. An Application to amend the Statement of Claim was not made until the day of the trial. Murnaghan J., held that heavy costs had been incurred by the Defendants but none the less adjourned the case to enable a new Statement of Claim to be delivered but on condition that the Plaintiff paid all costs incurred by the Defendants from the 16th June 1971 to the 18th February 1972 together with the costs of the Motion to amend.

In each of those cases there may have been facts which justified the Judge in exercising his discretion in imposing the condition which he did. In the present case there are

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no facts in evidence before me which would justify the making of an order that the Petitioners as a condition of being permitted to re-amend their petition and proceed with the action should either pay the costs which the Court has awarded to the Respondents or should give security for those costs.

There is no evidence before me that the Petitioners would be unable to pay or would seek to avoid paying costs. Apart from any other assets which they might have in the jurisdiction, as to which I have no evidence, the Petitioners are the admitted owners of 10.172 per centum of the shares in John Atkins & Company Limited. This company, according to a statement of affairs presented at a meeting of the company on the 21st of May 1996 for the purpose of Section 60 of the Companies Act, 1963, had capital reserves of £1,812,984.00 and in the year ending 31st October 1997 paid an increased dividend notwithstanding an operating loss of £61,927.00. Having regard to the usual one third basis upon which a sum to be lodged as security for costs is assessed it seem to me that no case could be made by the Respondents that the Petitioners would not be able to pay the costs hereinbefore awarded.

At paragraph 9 of the Affidavit of Cormac O’Hanlon, Solicitor, of J W O’Donovan, Solicitors who are solicitors for the Petitioners in these proceedings, sworn on the 3rd of July 2000 for the purpose of grounding the Motion to re-amend it is stated as follows:-
“I believe that these issues together with the other related issues in respect of which liberty to amend is now sought, were not pleaded in the Petition or in the Amended Petition simply because neither I nor Counsel believed it necessary to do so. Rather, we perceived that the Petition and Amended Petition were adequate in this present form to encompass those issues. It is both appreciated and accepted that the learned trial Judge has ruled otherwise, but the Petitioners legal advisors at all stages prior to the ruling of

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the learned trial Judge perceived that the pleadings were in order and that they encompassed the two particular issues to which I have referred.”

This averment is not rebutted in any replying Affidavit by or on behalf of the Respondents. There is no evidence before me that either through negligence or recklessness the Petitioners permitted this action to come to trial knowing that the Petition was deficient and that permission to amend would have to be sought from the Court, meanwhile allowing the Respondents to incur very substantial costs and expenses.

In my Judgment for this Court in these circumstances to order that the Petitioners should pay costs by this Judgment awarded to the Respondents as a condition of their being permitted to re-amend the Petition and to rely upon these re-amendments at the adjourned hearing of this action would be to penalise the Petitioners for the error made and I do not accept that this Court has any such power, or if it did that on the evidence I have any rational or logical justification for invoking that power.

In the course of his Judgment in Cropper -v- Smyth (1883) 26 Ch. D. 700 at 710/711, Bowen L.J. held as follows:-
“It is a well established principle that the object of the Court, (in granting leave to amend), is to decide the rights of the parties, and not to punish then for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights….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 grace….”

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This passage had been cited with approval by Flood J., in Palamos Properties Limited and O’Neill -v- Brooks and Ors [1996] 3 IR 597 at 603 by the Supreme Court, (Murphy J), in Aer Rianta International CPT -v- Walsh Western International Limited [1997] 2 ILRM 45 at 51 and O’Sullivan J in Cornhill and Ors -v- The Minister for Agriculture and Food, 13th of March 1998, unreported, but copy judgment available).

I therefore decline to order that the Petitioners give security for costs or pay such costs as a condition of being permitted to re-amend their Petition and proceed with this action. I will however order that the Respondents be at liberty to proceed forthwith with the taxation of the costs hereinbefore awarded, but not for their payment.