High Court of Ireland Decisions

1. In these proceedings, three motions were listed for hearing before this Court on the 22nd day of November 1996. The first in time is a motion issued on the 13th March, 1996 by the Plaintiffs to amend their Statement of Claim in the action. The second is a motion issued on the 17th May, 1996 by the Defendant seeking to have the Plaintiffs' action struck out for delay and want of prosecution. The third is a motion issued on the 29th May, 1996 by the Plaintiffs seeking the reinstatement of the proceedings in the Non-jury List of Uncertified Cases.

2. Counsel for the parties agreed that the logical course was for the Court to deal in the first place with the Defendant's motion to strike out the proceedings (the second motion). If the Defendant did not succeed in this motion, the Court could then pass on to consider the Plaintiffs' motion to amend the Statement of Claim, which was vehemently opposed by the Defendant.

3. The history of the proceedings is lengthy and somewhat tortuous. The Plaintiff Company's business was that of marine contractors and shipping charterers. The Defendant, originally Messrs. Mathews Mulcahy & Sutherland Limited, but now Messrs. Marsh McLennan (Ireland) Limited, is a company of insurance brokers. For a period during the 1970's, the Defendant arranged shipping insurance for the Plaintiffs. The Plaintiffs' claim is one of breach of contract and negligence against the Defendant which originally arose out of a shipping accident which occurred on the 26th September, 1975. As a result of this accident, a total of three claims were made in the High Court against the Plaintiff Company. Awards of damages totalling £263,409.00 were made against the Plaintiff Company of which only £50,000 was covered by their insurance. The essence of the Plaintiffs' original claim in their action is that the Defendant, as their insurance broker, purported to have insured them fully against all risks but in fact had failed to do so and left them exposed to the loss and damage arising from the 1975 accident. The Plaintiffs now seek to amend their Statement of Claim to introduce new claims on behalf of the second named Defendant for personal losses including loss of earnings. It is not, however, necessary to deal at this point with this aspect of the matter. In the original claim, the Plaintiffs relied both on letters written to them by the Defendants in 1973 and on alleged assurances given to them in meetings and telephone conversations with the Defendant and, in particular, with one Cathal McAllister, who was then the main person handling shipping insurance on behalf of the Defendant. The said Cathal McAllister died in 1986.

4. In the three accident claims, judgment was given against the Plaintiffs in the High Court on the 28th January, 1980. On the 8th February, 1980, the Supreme Court granted a stay on those judgments until the 22nd February, 1980 to enable a Notice of Appeal to be filed. On the 10th March, 1980, Notice of Appeal having been filed, the Supreme Court again stayed the judgments of the High Court pending the determination of the appeal but attached a condition that the Plaintiff Company should lodge £100,000 in Court. This money was never lodged. On the 15th January, 1982, the stay was lifted and costs given against the Plaintiffs and this was effectively the end of the appeal.

5. On the 25th February, 1981, the Plaintiffs issued their Plenary Summons in the present proceedings. It was served on the Defendants on the 10th March, 1981 and an appearance was entered on the 12th March, 1981. No further step was taken by the Plaintiffs until the 28th September, 1984 (three and a half years later) when the Plaintiffs' solicitors wrote to the Defendant's solicitors requesting a letter of consent to late filing of the Statement of Claim. No reply to this letter was forthcoming. It was not followed up until the 31st July, 1985 when a Notice of Intention to Proceed was served by the Plaintiffs. The Statement of Claim was eventually delivered on the 11th December, 1985, consent to late filing having been given. No further steps were taken until a second Notice of Intention to Proceed was filed on the 2nd December, 1986 and subsequently a Motion for Judgment was issued by the Plaintiffs returnable for 16th March, 1987.

6. There was a reasonable amount of activity in the proceedings during the two years, 1987 to 1989. Particulars were raised by the Defendant and replied to by the Plaintiffs in May-June 1987 and after a further Motion for Judgment, defence was delivered by the Defendant on the 18th July, 1988. The reply to the defence was delivered on the 20th October, 1988 and Notice of Trial dated the 3rd January, 1989 was delivered by the Plaintiffs. On 6th March, 1989, further particulars were requested and replied to by letter dated 8th May, 1989.

7. A discovery procedure then began, an Order and Cross-order for discovery having been made on 10th March, 1989. The discovery procedure appears to have lasted until at least 1992. Counsel for the Plaintiffs argues that the entire of this delay was due to the actions of the Defendant but Counsel for the Defendant submits that the major part of the delay was due to the fact that the Plaintiffs were, for a very long time, unwilling to discover crucial papers in connection with the original proceedings which arose from the 1975 accident. Eventually, the Plaintiffs were ordered by the Master to discover this documentation.

8. Meanwhile, on 6th November, 1990, the first named Plaintiff (the shipping company) was struck off the Companies Register; it appears likely that this was due to a failure to file returns. The Plaintiff Company was not restored to the Companies Register until the 27th November, 1995 so that, legally speaking, for a period of five years, the first named Plaintiff had no existence. The Defendant did not discover until December 1992 that the Plaintiff Company had been struck off.

9. On 15th June, 1993, the proceedings were listed in a call-over of a List of Uncertified Cases. The Defendant's solicitors attended this list but there was no appearance on behalf of the Plaintiffs and the proceedings were struck out of the list. The non-appearance of the Plaintiffs in the list is explained in the Affidavit of the Plaintiffs' solicitor, Anthony Neville, as due to the fact that the letter which his town agent sent to him informing him that the matter was appearing in the list arrived in his office after the 15th June, 1993. Apparently, it was felt that the case was not then ready to be certified by Counsel and, therefore, no application was made to reinstate it in the list. However, no notification of this was sent to the solicitor for the Defendant who therefore presumed that the proceedings were no longer being pursued particularly in view of the fact that he was aware that the company had been struck off the register.

10. However, on 5th November, 1993, the Plaintiffs' solicitors wrote to the Defendant's solicitors enclosing an amended Statement of Claim. The Plaintiffs' solicitors had not sought the consent of the Defendant's solicitor to the serving of an amended Statement of Claim nor had any Order been sought from the Court to permit the service of an amended Statement of Claim.

11. The next step that was taken by the Plaintiffs' solicitors was on 4th April, 1995 when they wrote to the Defendant's solicitors requesting an appointment to inspect documents. This letter was replied to on 2nd June, 1995 when the Defendant's solicitors drew attention to the various matters which had led them to believe that the action was no longer proceeding. There was further correspondence and the Plaintiffs' solicitors served a Notice of Intention to Proceed dated 16th January, 1996, the first named Plaintiff Company having been reinstated in the Companies Office on 27th November, 1995. The three motions which were listed before this Court on 20th November, 1996 were then issued.

12. In summary, Counsel for the Defendant submits that there has been inordinate and inexcusable delay by the Plaintiffs in dealing with these proceedings. She states that the original Contract of Insurance was in 1969 and the letters and conversations relied upon in the Plaintiffs' claim took place between 1973 and 1975, over 20 years ago. She submits that an absolutely essential witness for the Defendant would be Mr. Cathal McAllister, who was the person who dealt with the Plaintiffs' insurance affairs and who held the meetings and telephone conversations with the Plaintiffs at the time. Mr. McAllister died in 1986. She also submits that the present Defendant Company has taken over the business of the original Defendants, Messrs. Mathews Mulcahy & Sutherland Limited, and that the offices of the company have been moved with resultant mislaying or destruction of necessary files, all of which date back to periods of up to 20 years ago. Ms. Macken argues that it is impossible for the Defendant to defend the proceedings properly due to the lengthy delay which has occurred both between the original accident and the present time and between the issue of the proceedings in 1981 and the present time.

13. Counsel for the Plaintiffs, Mr. O'Driscoll, submits that the delays on the part of the Defendant have been at least as great as those on the part of the Plaintiffs. He submits that it was not possible for the Plaintiffs to issue their proceedings until judgment in the original accident claims had been delivered in the High Court in January 1980 and that, in fact, the Plaintiffs' proceedings should not have been issued until after the end of the appeal proceedings in the Supreme Court in 1982. He argues that a major part of the delay in the issue of the Statement of Claim was due to the Defendant's failure to agree to late filing in reply to the Plaintiffs' letter of 28th September, 1984 and that a great deal of the delay was due to the Defendant's failure properly to make discovery and produce documents for inspection. He submits that a great deal of the arguments of the Defendant could be described as the pot calling the kettle black and that if the Defendant chose to let sleeping dogs lie for long periods in the action, the Defendant could not then argue that the delays in the proceedings were entirely the fault of the Plaintiffs. Mr. O'Driscoll was also extremely critical of the Defendant's argument that papers and files had been mislaid or destroyed: his view was that it was an essential duty of the Defendant to preserve all papers relevant to an action that was still in being.

14. In his Affidavit on behalf of the Plaintiffs, Mr. Anthony Neville, solicitor for the Plaintiffs, explains at least part of the delay in the issue of the original Statement of Claim and of the amended Statement of Claim as being due to the need to have actuarial calculations done as to the exact losses suffered by the Plaintiffs. I am not at present dealing with the matters set out in the amended Statement of Claim (although in fact I would not have thought that the calculations in the amended Statement were particularly difficult by ordinary actuarial standards). However, I cannot see how it can be argued that there was any complexity in assessing the damages in the original Statement of Claim since they are set out as being the damages granted by the High Court in the original accident claims less the £50,000 insurance cover which did exist. These figures were clearly known to the Plaintiffs and their solicitors and Counsel by January 1980.

15. Mr. Neville also states in his Affidavit that he was unaware of the correct procedure for obtaining a Court Order to issue an amended Statement of Claim and thought that he could only do so by agreement with the Defendant. Since the whole procedure of amendment of pleadings is dealt with clearly under Order 28 of the Rules of the Superior Courts, it seems quite extraordinary that an experienced solicitor would be unaware of these procedures and would allow a period of some eight years to elapse between the issue of the original Statement of Claim and the service of the amended Statement of Claim.

16. There is a very considerable line of authority both in the High Court and in the Supreme Court in regard to the striking out of proceedings due to inordinate delay and Counsel for the Defendant and for the Plaintiffs most helpfully referred me to a number of relevant judgments. The most recent and most comprehensive survey of the law in this area has been undertaken by the Supreme Court in the judgments of the Chief Justice and of O'Flaherty J. in the cases of Primor Plc -v- Stokes Kennedy Crowley and Primor Plc -v- Oliver Freaney & Company - unreported judgments of 19th December, 1995. The two cases were heard and decided together by the Supreme Court. In the first part of his judgment, the Chief Justice carefully and comprehensively surveys the previous law in this jurisdiction and also in the English jurisdiction. At pages 24 to 26 of his judgment, he sets out the relevant principles of law as follows:-

17. The learned Chief Justice goes on to consider firstly whether the delay was inordinate and inexcusable and, secondly, whether the total delay has been such that a fair trial between the parties could not at that time be had.

18. O'Flaherty J., in his judgment, also stresses the essential question as to whether, after inordinate and inexcusable delay, a just and fair trial may be had between the parties.

19. It is, therefore, in the light of these principles that I must approach the present case.

20. Firstly, a delay of over 15 years since the issue of the Plenary Summons is undoubtedly inordinate, especially when one bears in mind that the actual events giving rise to the claim date back to 1973 to 1975. The situation is aggravated by the fact that the action, even now, cannot proceed with reasonable speed since the Plaintiffs, at the present time, are seeking substantial and crucial amendments to the Statement of Claim which would, in my view, inevitably lead to a whole new round of particulars, discovery and so on before the case could come on for trial.

21. Is the delay inexcusable? In my view, it is. I leave aside the question as to whether the proceedings should have been issued prior to 1981, as even without this first lapse of time, inordinate delay is already established. I have already dealt with the excuse that the framing of the original Statement of Claim required complex calculations. I also reject the argument made by Mr. O'Driscoll on behalf of the Plaintiffs that a large part of the delay in issuing and serving the Statement of Claim was due to the failure of the Defendant to reply to the Plaintiffs' letter seeking consent to late filing. No doubt, the Defendant's solicitor should have replied to the letter one way or the other but the Plaintiffs, had they been eager to prosecute their claim, could readily have applied to the Master of the High Court for an extension of time. It has also been argued that the Plaintiffs were not certain of their true insurance position until after they had corresponded with the Insurance Corporation of Ireland in 1983. But again, it must be accepted that the Plaintiffs are businessmen and must surely have ascertained in outline at a fairly early stage after the accident what their true insurance position was.

22. At a later stage, delays in the discovery procedure can be attributed to both sides but the delay in dealing with the amended Statement of Claim is purely that of the Plaintiffs. Again, I have already dealt with and rejected the excuse put forward by the Plaintiffs' solicitor in this regard and with his inadequate explanation of the fact that when the case was struck out in June 1993 (as can happen accidentally), he did not move to have it reinstated until another three years had passed.

23. Therefore, while the Defendant is not blameless in the matter of delay, I am constrained to hold that the Plaintiffs' delay in these proceedings was inexcusable given the tenor of the correspondence exhibited in the pleadings and given the history of the matter as a whole. I do not think that the delay of the Defendant or the Defendant's conduct amounted to acquiescence in the Plaintiffs' delay. This is particularly so in the more recent part of this unfortunate saga, between the years 1992 and 1996. A crucial factor during this period is that from 1990 until November 1995, the first named Plaintiff Company was non-existent.

24. In all the circumstances of this case, I do not accept that the conduct of the Defendant, while at times it encouraged the Plaintiffs to incur further expenditure in the proceedings, can operate as a bar to the obtaining of an Order striking out the proceedings.

25. The final question to be decided therefore is whether a fair and just trial may be had between the parties at this stage.

26. Where in any trial the issues between the parties which fall to be decided by the Court can clearly be established by documentary evidence only, it may well be that delay, however inordinate or inexcusable, will not in fact prevent the holding of a fair and just trial. However, where matters are at issue which are not, or are not fully, covered by documentary evidence, there is a greater likelihood of prejudice resulting from delay.

27. In the present case, the Defendant Company claims that prejudice will arise under a number of headings. These are set out in the Affidavit sworn by David Caird, Chairman of the Defendant Company, on the 14th May, 1996. In particular, at paragraph 11 of that Affidavit, Mr. Caird lists a number of what he describes as "significant difficulties in seeking to defend the proceedings" as follows:-

28. Mr. O'Driscoll, on behalf of the Plaintiffs submitted that the difficulties set out at (b), (e) and (f) should not have arisen. The company was aware since the time of service of the Plenary Summons in March 1981 that an action was in being and all relevant files and papers should have been carefully preserved. While I have a certain sympathy with these difficulties of the Defendant Company in regard to documentary evidence, I must accept that there is validity in the point made by Mr. O'Driscoll. Despite the length of time which has elapsed since 1981 and despite the difficulties and delays, it would have been wise and prudent for the Defendant Company to preserve relevant documentary evidence until the Defendant was absolutely certain that the proceedings had been either unambiguously withdrawn by the Plaintiffs or completely struck out by the Court. Were this to be a case wholly dependent on documentary evidence, I would not be willing to dismiss it on account of these difficulties on the part of the Defendant.

29. However, the matter is somewhat more complex and documentary evidence alone is not the end of the matter. In the Statement of Claim under the heading "Particulars of Representation", reference is made to three letters written by the Defendant Company to the Plaintiff Company on the 26th February, 1973, the 13th November, 1973 and the 29th September, 1975. However, in the Plaintiff's letter dated 18th June, 1987 replying to the Defendant's letter for particulars, it is stated that-:

30. Again, in the Plaintiffs' letter of the 8th May, 1989 in reply to the Defendant's further letter for particulars, the Plaintiffs, in giving further and better particulars of the "negligent and inaccurate advice alleged in the Statement of Claim" stated as follows:-

31. In the Affidavit of Mr. Caird sworn the 28th November, 1996, there is exhibited a letter dated the 25th March, 1980 written by the Defendant's solicitors to the Plaintiffs' solicitors. This letter was written before the issue of the Plaintiffs' Plenary Summons but it throws considerable light on the matters which would be at issue between the Plaintiffs and the Defendant at any trial of the present action. The letter refers to reports contained in the Irish Times and the Cork Examiner of an Affidavit sworn by the second named Plaintiff, Mr. Michael J. Carroll, in connection with the then application to the Supreme Court for a stay on the judgments of the High Court in the cases arising from the 1975 accident. In the course of this letter, the Defendant's solicitors state as follows:-

32. It appears both from the statements contained in the replies to particulars and from the above letter than important issues as to the verbal advices given by the Defendant and as to the state of information and state of mind of the Plaintiffs are certain to arise at any trial of this action. The actual negotiations concerning the Plaintiffs' insurance position took place between 1969 and 1975, over 20 years ago. In this context, the difficulties set out by Mr. Caird in his Affidavit quoted above at paragraph 11(a), (c), (d) and (g) are very relevant. Above all, it appears to be agreed that Mr. Cathal McAllister was the main person dealing with marine insurance in Messrs. Mathews Mulcahy & Sutherland and that it was he who negotiated with and advised the Plaintiffs during the period 1969 to 1975. Mr. McAllister having died in 1986, the Defendant Company is severely prejudiced in endeavouring to deal with the negligence claims of the Plaintiffs in a trial which is unlikely to take place until at the earliest late 1997. In addition, persons who might have either supervised or assisted Mr. McAllister in dealing with the Plaintiffs' business are now no longer employed by the Defendant Company. Even were they to be available for the purposes of giving evidence, there is no doubt that their memory of the events of over 20 years ago would be dangerously defective.

33. I am therefore satisfied that the prejudice caused to the Defendant by the inordinate and inexcusable delay on the part of the Plaintiffs is such as to place an unfair burden on the Defendant Company in defending these proceedings and is such as to make it impossible that a fair trial between the parties can now be had. I am also satisfied that the interests of justice require that the proceedings brought by the Plaintiffs be now dismissed.