High Court of Ireland Decisions

1. The Plaintiff’s claim is for damages for breach of contract. It alleges that it entered into an agreement with the first named Defendant to act as agent for the first named Defendant in Ireland for the sale in Ireland of travel packages to the 1994 world cup in the USA. The agreement it is alleged was negotiated and concluded with the second and third named Defendants acting as agents for the first named Defendant. The central issue in the action is the authority of the second and third named Defendants to conclude the alleged agreement.

2. The proceedings in the action were as follows:-

3. There was no correspondence between the Solicitors to the Plaintiff and the Solicitors to the first named Defendant in the period from June 1997 to the 25th May 1999.

4. It is clear from the foregoing that there has been delay on the part of the Plaintiff. Following the Order dated 13th May 1996 joining the second named and third named Defendants as defendants the amended Plenary Summons was not issued. However a form of amended Plenary Summons and Statement of Claim was served on the second named and third named Defendants on the 22nd October 1996. The failure to issue an amended Plenary Summons came to light when the Solicitors for the second named and third named Defendants attempted to enter an appearance on the 11th February 1997. While the necessary papers for an application for an extension to the time limited by the Order of 13th May 1996 were drafted the matter was thereafter overlooked and it was only on the 26th July 1999 that an Order was made extending the time for the issue of the amended Plenary Summons and the delivery of the amended Statement of Claim. The amended Plenary Summons was thereafter duly served on the second named and third named Defendants on the 3rd August 1999 and the amended Statement of Claim was delivered on the same date. There was accordingly a period of delay extending form early June 1996 to late July 1999 a period of more than 3 years. However during that period matters progressed between the Plaintiff and the first named Defendant to the point where the motion for further and better discovery against the first named Defendant was struck out on consent on the 16th January 1997. Correspondence ensued in relation to discovery but this ceased in June 1997. Accordingly a period of complete inactivity ran from June 1997 to July 1999 a period of two years.

5. On the 20th March 2000 the first named Defendant issued a motion seeking the following reliefs:-

6. The broad principles applicable to an application of this nature were set out by Finlay P in Rainsford -v- Limerick Corporation (1995) 2 ILRM 561 at 567 as follows:-

7. I find that the delay of the Plaintiff in this matter is both inordinate and inexcusable. Insofar as the Plaintiff's personal blameworthiness is concerned the Solicitor to the Plaintiff has sworn an Affidavit in which he frankly accepts responsibility for the delay. There is nothing in any of the Affidavits filed on this application to suggest that there exists any personal blameworthiness on the part of the Plaintiff beyond that of it’s Solicitor for which it is vicariously liable. This is a factor which I must take into account in determining how I should exercise my discretion to dismiss the Plaintiff’s claim.

8. In considering a parties personal blameworthiness one must look at the circumstances of the party. In the case of an infant Plaintiff this circumstance will most likely justify delay during his minority: O’ Domhnaill -v- Merrick 1984 I.R. 151. In Guerin -v- Guerin 1992 2.I.R.287 Costello P. had regard to the circumstances that while the Plaintiff was an infant his family lived in one of the poorest sections of the community, the permanently unemployed, and were unaware that he the Plaintiff had a cause of action. Such considerations have little application to the Plaintiff in the present case which is a considerable commercial enterprise and must be expected to pursue litigation of a commercial nature with reasonable expedition and to that end take steps to ensure that it’s legal advisors act in an appropriately expeditious manner. Lack of personal blameworthiness in litigation such as this is of less significance than in cases such as O’Domhnaill -v- Merrick and Guerin -v- Guerin .

9. I must now proceed to determine on the facts whether the balance of justice is in favour of or against the proceeding of the case. In all the circumstances of this case there must be a balancing of the prejudice to the Plaintiff in having his claim against the first named Defendant dismissed and any prejudice to the first named Defendant in the matter proceeding resulting from the Plaintiff’s delay.

10. It appears from the Affidavits filed before me that the third named Defendant went into liquidation on the 1st July 1998 with an estimated deficiency of some £545,000 sterling. The third named Defendant was incorporated on the 26th March 1991 and commenced trading on the 1st January 1992. The following is a summary of its financial results:-

11. Period to 31st March 1992 net loss £ 4,848.00 sterling

12. As at the last mentioned date the Company had accumulated losses of £53,091 sterling.

13. Notwithstanding the third named Defendant’s poor trading performance it seems likely on the papers exhibited in the Affidavits before me that it could well have continued to trade had it not run into difficulties in organising tours for the 1998 world cup which difficulties were the immediate cause of its collapse. The first named Defendant claims that it has been prejudiced by the delay on the part of the Plaintiff in prosecuting these proceedings in that had the claim been prosecuted diligently a hearing would have been obtained in advance of the liquidation of the third named Defendant. Further following the liquidation of the third named Defendant the second named Defendant took no interest in the proceedings and the Solicitors retained by him and the third named Defendant have come off record and there is now no Solicitor on record. The delay they allege has denied them the opportunity of obtaining contribution or indemnity from the third named Defendant and seriously diminished the possibility of their obtaining contribution or indemnity from the second named Defendant. I note however that no notice seeking contribution or indemnity has been served by the first named Defendant on the second named Defendant or the third named Defendant: however it would not be unusual for such a Notice to be served a relatively short period of time before the date fixed for the hearing of the action. In the ordinary course of events had the action been prosecuted by the Plaintiff with reasonable expedition it could have obtained a date for hearing within the period of 9 to 18 months following the striking out of the Plaintiff’s motion for further and better discovery on the 16th January 1997 that is during the legal year 1997-1998. Having regard to the trading history of the third named Defendant I am not satisfied as a matter of probability that had the first named Defendant prior to the liquidation obtained a Judgment for contribution or indemnity during that period the third named Defendant would have been in a position to satisfy the same. In these circumstances whether or not the third named Defendant was in liquidation is unlikely to have been a circumstance which would lead the second named Defendant to adopt an attitude to the litigation different to that which he is now adopting. Accordingly I do not think that the circumstance that the third named Defendant has gone into liquidation is one which renders the delay prejudicial to the first named Defendant.

14. The first named Defendant further claims to be prejudiced in that it is now unlikely that the second named Defendant will appear at the hearing and that they will be denied his evidence and which evidence would be likely to benefit the first named Defendant firstly in enabling it to test the account of negotiations between the Plaintiff and the second named Defendant which would be given in evidence adduced on behalf of the Plaintiff and secondly on the issue as to implied authority of the second named and third named Defendants to bind the first named Defendant. While I can have no knowledge of the evidence which the second named Defendant might give if available as a witness it is appropriate that I should assume for the purposes of this application that it could be of assistance to the first named Defendant. Whatever might be the attitude of the second named Defendant to the claim against the third named Defendant having regard to its liquidation the circumstances in relation to the claim against him personally are not altered by the liquidation of the third named Defendant. Any Judgment obtained against the second named Defendant in these proceedings can readily be enforced in the United Kingdom. For this reason it is difficult to see that the liquidation of the third named Defendant should be a factor influencing him in deciding to take no part in these proceedings in his personal capacity: the non availability of the third named Defendant to bear some or all of an award of damages might be expected to cause him to take all steps to avoid personal liability. Accordingly as a matter of probability having adopted the attitude that he will take no part in these proceedings he would have adopted a like attitude had the liquidation of the third named Defendant not taken place. It is to be expected that someone in the second named Defendant’s position would be at least as anxious to defend himself against personal liability as he would be to protect form liability the corporate entity through which he traded. The absence of the second named Defendant’s evidence may also prejudice the Plaintiff in that there will not be available at the trial his account of the authority if any which he held from the first named Defendant to conclude the alleged agreement the subject matter of this action. I find that the non availability of the second named Defendant as a witness as a matter of probability is not as a result of the Plaintiff’s delay and the intervening liquidation of third named Defendant and accordingly is not a circumstance which I should take into account in considering the balance of justice.

15. Finally the Plaintiff instituted these proceedings on the 13th June 1995 in respect of an alleged breach of contract in February 1994. The Limitation Period would not have expired until February 2000. I take this into account in considering the Plaintiffs overall conduct of the action. The first named Defendant could have issued this Motion at a much earlier date - at any time after July 1998 - had it so wished. Rather it chose to delay doing so until the Limitation Period had expired. This I also take into account in determining the balance of justice.

16. In the light of all the foregoing I am satisfied that the balance of justice is in favour of allowing the action to proceed. Justice however requires that I impose a condition on the Plaintiff in prosecuting the action. Having elected to join the second named Defendant and the third named Defendants as Defendants rather than to have the first named Defendant join them as third parties the action must not be set down against the first named Defendant only but must be set down against the first named Defendant and the second named Defendant so that the first named Defendant’s claim for contribution and indemnity can proceed at the same time. I am assuming that there is no point in pursuing the third named Defendant : if I am wrong in this I will hear Counsel. I will hear Counsel on the costs of this application.