Supreme Court of Ireland Decisions

Judgment Title: Stephens -v- Flynn Ltd.

Neutral Citation: [2008] IESC 4

Supreme Court Record Number: 2005/204

High Court Record Number: 2001 17460P

Date of Delivery: 25 February 2008

Court: Supreme Court

This is an appeal from a decision of the High Court (Clarke J.) delivered on 28th April, 2005, whereby it was directed that the plaintiff’s claim be dismissed for want of prosecution on the grounds of the inordinate and inexcusable delay on the part of the plaintiff in the prosecution of the proceedings.

It is common case that the plaintiff employed the defendant company to construct a substantial house at Thornhill Manor, Hollymount, Co. Mayo. The contract for same was contained in an agreement in writing dated 9th December, 1994. The original contract price under the terms of the building agreement was €355,215.58, inclusive of V.A.T. Unhappy differences arose between the parties towards the conclusion of the project. The defendant complained that the plaintiff failed to make payments in accordance with the contract entered into, while the plaintiff in turn complained about delay in the construction process and about the quality of certain of the works carried out. Matters came to a head on 5th December, 1995, when the defendant boarded up the front door of the dwelling house then under construction. Mr. Paul Flynn, principal of the defendant company, contends that this was done in order to protect his position given the entitlement which he asserts he had under the contract to cease work when payment was in significant arrears. The plaintiff elected to treat the actions of the defendant as a repudiation of the contract which repudiation he accepted. In the High Court the issues between the parties were summarised by Clarke J. as follows:-

“In those circumstances he sues, in substance, for damages for wrongful repudiation which he measures as the cost of completing the building (including the cost of remedying the alleged effects) less the balance which remained unpaid as of the date of the alleged repudiation of the original contract price.

It would appear, therefore, that if this action were to go to trial the principal issues would be the following:-

(a) the factual circumstances surrounding the events leading to and on 5th December, 1995 insofar as they are material to the question of whether the Plaintiff was entitled to treat the Defendant as having repudiated the contract. Apart from the hotly contested events which occurred on the site on that day the other facts which seem, at this stage, to be likely to be relevant concern the progress of the contract, the extent to which there had been significant defects in the workmanship, and the payment record of the Plaintiff.

(b) Secondly in the event that the Plaintiff were to succeed in persuading the court that the contract had come to an end by virtue of his acceptance of a repudiation thereof by the Defendant the question of the quantum of his claim would arise which would necessitate a consideration of the work done up to the point of the termination of activity on site by the Defendant, the reasonable costs of completing the works contracted for including the remedying of any defective workmanship, and, perhaps, the extent to which it would be necessary in any such calculation as is contended for by the Plaintiff to take into account the possibility that the true value of the contracted works may have been varied by virtue of alterations in the requirements of the Plaintiff or other factors not attributable to the Defendant and recoverable under the contractual terms agreed between the Plaintiff and the Defendant.”

By Notice of Motion dated 14th March, 2002, the defendant sought an order directing the plaintiff to deliver a Statement of Claim. Other relief was also sought at that time, including an injunction restraining the plaintiff from making abusive telephone calls to Mr. Flynn or from approaching within five hundred metres of his residence. By order dated 19th March, 2002, the High Court (O’Neill J.) declined to grant any injunction and made no formal order in respect of the delivery of a Statement of Claim. It seems clear, however, that some agreement between the respective sides was reached in that respect, although it is not clear at this stage whether any formal undertaking was given by or on behalf of the plaintiff in this regard. By letter dated 20th March, 2002, the defendant’s solicitors wrote to the plaintiff’s solicitors requesting the outstanding Statement of Claim and threatening a motion to compel delivery. Replying on 26th March, 2002, the plaintiff’s solicitors advised that they were arranging a consultation to facilitate same. On 21st May, 2002, the plaintiff’s solicitors wrote to the defendant’s solicitors as follows:-

“I refer to the above and telephone conversation of even date wherein I advised that the delay in furnishing a Statement of Claim is due to the fact that my client’s engineer is in fact in hospital.

I have once again written to my client requesting his engineers report and have stressed the urgency with same.”

The Statement of Claim was ultimately delivered sixteen months later on 27th November, 2003. No Notice of Intention to Proceed had been served by the plaintiff, although a period of more than one year had elapsed since the last step in the action.

The only reason offered for the delay in the preparation of a Statement of Claim was the difficulty encountered in obtaining information from the plaintiff’s engineer, Mr. Cyril Kelly, because of his supposed illness and hospitalisation. In June, 2004 the present Notice of Motion issued seeking dismissal of the plaintiff’s claim for want of prosecution.

It is appropriate at this stage to refer to the further development which took place in this case subsequent to the hearing in the High Court before Clarke J. These factors are deposed to in an affidavit sworn by Mr. Kevin Rooney, the defendant’s solicitor, on the 18th January, 2008. He states that on 28th February, 2007, he had occasion to telephone Mr. Cyril Kelly in relation to an unrelated action. In the course of his discussion with Mr. Kelly he mentioned the issue and duration of his illness and hospitalisation in 2002 and 2003. He was extremely surprised when informed by Mr. Kelly that he had not been in hospital or even ill at the time when the plaintiff had sworn that he was unable to furnish the report required to enable the completion and delivery of the Statement of Claim.

The Plaintiff filed an affidavit sworn on 31st January, 2008, in response. In it he accepts that an averment of his contained in his affidavit sworn on 24th September, 2004, was an “error” and is incorrect. In swearing his affidavit before this Court, the plaintiff maintains that he had no independent knowledge of Mr. Kelly’s medical situation in September, 2004 when he swore his earlier affidavit. He states:-

“During my final review of that affidavit (i.e. the affidavit of September, 2004) I read the entry reference to Mr. Kelly’s hospitalisation and I specifically asked both Mr. Bourke and his assistant, Ms. Maria Quinn, the source of this entry. My recollection is that Ms. Quinn responded that she learned of it in a telephone conversation with Mr. Kelly. My reliance on the veracity of this averment was totally predicated upon information provided to me by Mr. Bourke and Ms. Quinn.”

That correspondence commences with a letter dated 26th March, 2002, from Mr. Kevin Bourke to the plaintiff informing the plaintiff that a date had been arranged for a particular consultation and that it was “vital” that Mr. Kelly be in attendance. The letter continues:-

“I would be obliged if you would make contact with Mr. Kelly and ascertain if he will be in a position to travel to Dublin on Wednesday, 10th April, 2002, for the proposed consultation”.

The Plaintiff further wrote to Mr. Kelly on 26th July, 2002, wherein he complained to Mr. Kelly that the latter had brought him unnecessarily to Galway to get a set of plans. The plaintiff wrote to his solicitor on 6th April, 2002, stating that he was attempting to “prod” Mr. Kelly into completion of his report. His letter continued:-

“I have repeatedly advised Cyril that I wish his fullest co-operation to allow this matter to proceed as rapidly as possible.”

JUDGMENT OF THE HIGH COURT
The learned High Court judge, by reference to the judgment of Finlay P. in Rainsford v. Limerick Corporation [1995] 2 I.L.R.M. 561 determined that the following general legal principles applied to an application to dismiss a claim for want of prosecution:-

“(1) In deciding whether to dismiss proceedings for want of prosecution, the court should inquire as to whether the delay on the part of the person seeking to proceed has been first inordinate and, even if inordinate, whether it has been inexcusable. The onus of establishing that the delay has been both inordinate and inexcusable lies upon the party who is seeking a dismissal and opposing a continuance of the proceedings.

(2) Where a delay has not been inordinate and inexcusable there are no real grounds for dismissing the proceedings.

(3) Even where the delay has been both inordinate and inexcusable, the court must further proceed to exercise a discretion, as to whether on the facts, the balance of justice is in favour of, or against the proceeding of the case. Delay on the part of a defendant seeking a dismissal of the action and, to some extent, a failure on his part to exercise his right to apply at any given time for the dismissal of an action for want of prosecution may be an ingredient in the exercise by the court of its discretion.

(4) While a party acting through a solicitor must, to an extent, be vicariously liable for the activity or inactivity of his solicitor, consideration of the extent of the litigant's personal blameworthiness for delay is material to the exercise of the court's discretion.”

“It follows a fortiori from what I have already said in relation to the effect of statutes of limitation upon the power of the court to dismiss actions for want of prosecution that time elapsed before the issue of a writ within the limitation period cannot of itself constitute inordinate delay however much the defendant may already have been prejudiced by the consequent lack of early notice of the claim against him, the fading recollections of his potential witnesses, their death or their untraceability. To justify dismissal of an action for want of prosecution the delay relied upon must relate to time which the plaintiff allows to lapse unnecessarily after the writ has been issued. A late start makes it the more incumbent upon the plaintiff to proceed with all due speed and a pace which might have been excusable if the action had been started sooner may be inexcusable in the light of the time that has already passed before the writ was issued.”

“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”

Clarke J. further noted that Order 27 of the Rules of the Superior Courts had been significantly amended to provide that the court “shall” dismiss an action on a second application to dismiss “unless the court is satisfied that special circumstances (to be recited in the order) exist which explain and justify the failure.”

He thus concluded that the court should approach the issue before it having regard to two central tests, namely:-

(a) Ascertain whether the delay in question is inordinate and inexcusable; and

(b) If it is so established the court must decide where the balance of justice lies.

In considering where the balance of justice lay, he concluded that there had been a very significant delay. Not only had the plaintiff failed to render that delay excusable, he had failed to do so by a significant margin. He also concluded that the defendant, were he to be compelled to meet the case, would suffer prejudice, although he did not place that prejudice at a higher degree than moderate. He also held that there was no significant delay on the part of the defendant in exercising his right to apply for the dismissal of the action for want of prosecution.

DECISION
While counsel for the plaintiff has urged this Court to treat this appeal as a completely fresh hearing of the original application, I am satisfied that this is not a correct approach where a discretionary order of the High Court is under review by this Court. Where, as in this case, a judge of the High Court makes a discretionary order, I am firmly of the view that this Court should not interfere with such order unless it is clear that the discretion has not been exercised within the parameters of what might be described as a reasonable exercise of that discretion. This was also the view of Lynch J. in Martin v Moy Contractors Ltd. (Unreported, Supreme Court, 11 February, 1999) in which he stated at p.13:-

“The High Court has a measure of discretion in these applications to dismiss actions for want of prosecution. Provided that the High Court decision is within the limits of reasonable discretion this court should not interfere with it. In this case the learned President gave a reasoned judgment and his reasoning is clearly valid. His decision naturally follows from such reasoning and is also therefore clearly valid. There is, accordingly, no basis on which this court should interfere with the judgment of the learned President save that I would order that the plaintiff’s action against Garlands should be dismissed for want of prosecution and not merely struck out.”

Accepting, as both sides to this appeal do accept, that the relevant legal principles are correctly elaborated in the judgment of the High Court, I believe for the purpose of the present application I need go no further than to refer to that passage in Gilroy v. Flynn in which Hardiman J., having identified the traditional jurisprudence in Rainsford v. Limerick Corporation [1995] 2 I.L.R.M. 561 and Primor Plc. v. Stokes Kennedy Crowley [1996] 2 I.R. 459, referred to the significant development represented by the change effected by Statutory Instrument No. 63 of 2004 to Order 27 of the Rules of the Superior Courts which provides that on the hearing of a second application to dismiss, the court “shall” order the action to be dismissed unless satisfied that “special circumstances” exist which explain and justify the failure. He then continued (at p.293):-

“Secondly, the courts have become ever more conscious of the unfairness and increased possibility of injustice which attached to allowing an action which depends on witness testimony to proceed a considerable time after the course of action accrued. Thirdly, following such cases as McMullen v. Ireland ECHR 422 97/98, 29 July, 2004 and the European Convention on Human Rights Act 2003 the courts, quite independently of the action or inaction of the parties, have an obligation to ensure that rights and liabilities, civil or criminal, are determined within a reasonable time.

These changes, and others, mean that comfortable assumptions on the part of a minority of litigants of almost endless indulgence must end. Cases such as those mentioned above will fall to be interpreted and applied in light of the countervailing considerations also mentioned above and others and may not prove as easy an escape from the consequences of dilatoriness as the dilatory may hope. The principles they enunciate may themselves be revisited in an appropriate case. In particular, the assumption that even grave delay will not lead to the dismissal of an action if it is not on the part of plaintiff personally, but of their professional advisor, may prove an unreliable one.”

I believe it is important to consider the norm in cases of this nature for the taking of the particular step in question. The Superior Court Rules state that a plaintiff may deliver a Statement of Claim with the Plenary Summons or at any time within twenty-one days from the service thereof. That this was an appropriate case for serving both Summons and Statement of Claim together, having regard to the enormous period of time which had elapsed since the events of 5th December, 1995, can hardly be in doubt. However, no fault in any legal sense for failing to do so can be attributed to the plaintiff, nor should he be faulted for failing to deliver a Statement of Claim either within the specified time frame in the Rules or within a time frame that might have been appropriate for a simple personal injuries action. This was a building contract which required proof of damage through the assistance of expert witnesses.

In the ordinary course of events, no court would rigidly apply a twenty-one day period for delivering a Statement of Claim or see non-delivery within that time as a failure which would justify dismissal of proceedings, even in the simplest of cases. Equally, even the most complex of cases must be prosecuted with due expedition and an appropriate sense of urgency. However, the period of twenty months is totally outside any period of time that might be considered appropriate or reasonable and is clearly, and was so found by Clarke J., to be inordinate. The challenge to that finding is unsustainable.

Even more unsustainable is any suggestion that the finding of the learned High Court judge that the delay was inexcusable was in any way erroneous. On the contrary, the newly-discovered facts in this case fatally undermine each and every part of the excuse offered by the plaintiff. His engineer was not ill or in hospital at the relevant time when Mr. Stephens asserts he was so indisposed. He was never indisposed. The explanation offered by way of excuse for delay falls away entirely in this case.

In relation to any consideration as to where the balance of justice lies, the Court is quite satisfied that the learned High Court judge was completely correct on this issue also. He correctly identified the relevant factors and indeed may well have expressed his views more forcibly had he been aware of the factual matters which were drawn to the attention of this Court in the context of the appeal.

The defendant and his company have been much put upon by the bringing and continuance of these proceedings. They have involved the defendant company and its principal in a protracted legal dispute which has undoubtedly caused Mr. Flynn much anxiety and concern. The balance of justice clearly demands that this state of affairs be brought to an end.

I would, therefore, favour dismissing the appeal and affirming the order of the learned High Court judge herein.