High Court of Ireland Decisions

1. A defendant who wishes to join a person as a third party to proceedings must serve a Third Party Notice upon such person as soon as is reasonably possible. The temporal obligation to which I have just referred is to be found both in the relevant statutory provisions, the Rules of the Superior Courts and the jurisprudence which has developed on this topic.

2. Section 27 subsection (1) of the Civil Liability Act, 1961 provides:-

3. This judgment is concerned only with the circumstances outlined in Section 27(1)(b). It is to be noted that the stricture in respect of time is limited to the situation dealt with in that subsection, namely, a claim for contribution being made against a person who is not already a party to an action.

4. Order 16 of the Rules of the Superior Courts governs third party procedure. Order 16.1(iii) provides:-

5. This provision of the Rules of the Superior Courts gives expression in a concrete form to the temporal imperative contained in Section 27(1)(b) of the 1961 Act. It is to be noted that the Rules of Court require the application to be made not within 28 days from the delivery of the defence in the proceedings but within 28 days from the time limited for delivering the defence . That time is fixed by Order 21 of the Rules of the Superior Courts. In a case where a defendant does not by notice require a Statement of Claim, the defence must be delivered within 28 days from the entry of appearance. In any other case it must be delivered within 28 days of the date of delivery of the Statement of Claim or from the time limited for appearance, whichever shall be later. It is clear, therefore, that the Rules of Court contemplate an application for the joinder of a third party being made at quite an early stage in the proceedings.

6. Under Order 16 Rule 8(3) third party proceedings may at any time be set aside by the Court. It is this jurisdiction which is invoked on this application.

7. The third party appealed against the order made in the High Court in November 1987 adding him as a third party to the proceedings.

8. In the course of his judgment, Finlay C.J. expressed his view as to the true meaning of the first sentence in Section 27(1)(b) of the 1961 Act. He said:-

9. The view expressed by Finlay C.J. in this case is clearly authority for the proposition that the obligation to serve a third party notice as soon as is reasonably possible is mandatory in nature and a failure to comply with that temporal obligation may lead to the application for liberty to issue and serve the third party notice being refused or, if granted, being set aside on the application of the newly joined third party.

10. The topic was considered by Morris J. in Dillon v. MacGabhann (unreported judgment 24th July, 1995). In that case he set aside a third party notice which had not been served or indeed even sought as soon as was reasonably possible. He relied upon the decision of the Supreme Court in the St. Laurence's Hospital case.

11. The same judge considered the matter again in the case of Carroll v. Fulflex International Company Limited (unreported judgment 18th October, 1995). That again was an application to set aside the third party proceedings. On that occasion he declined to make the order but in so doing made it clear that he was not in any way departing from the principles enunciated by the Supreme Court in the St. Laurence's Hospital case. He declined to set aside the third party proceedings because there had been an exchange of pleadings as between the defendants and the third party and the issue as between them was actually listed for trial. He took the view that it would be entirely inappropriate that having pursued that course and with the action ready to be heard, the third party should come to Court seeking to set aside a procedure in which they had taken an active part. He held that a motion to set aside a third party notice should only be brought before significant costs and expenses had been incurred in the third party procedures. A third party who wishes to have a third party notice set aside should move as soon as is reasonably possible.

12. In considering applications of this sort, the Court is not concerned with any question of prejudice arising as a result of the delay in applying for liberty to join the third party. This was accepted by Counsel appearing on behalf of the Defendants in the present case and seems to follow from the interpretation given to the relevant provision by Finlay C.J. in the St. Laurence's Hospital case.

13. The third and fourth third parties to the instant proceedings, namely, Plannja Limited and Plannja A.B. apply pursuant to Order 16, Rule 8(iii) of the Rules of the Superior Courts to have the Third Party Notices served upon them on the 26th April, 1996 set aside. They do so on the grounds that they were not served with such notices as soon as was reasonably possible pursuant to and within the meaning of Section 27(1)(b) of the Civil Liability Act, 1961. They also do so on the grounds that the application was not made within the time limit provided for in Order 16, Rule 1(iii) of the Rules of the Superior Courts but the principal thrust of their argument was founded on the Defendant's failure to comply with the statutory provisions.

14. The action as between the Plaintiff and the Defendant was commenced by the issue of a Plenary Summons on the 10th February, 1994. In that summons the Plaintiff claimed damages for breach of agreement, negligence, breach of duty, breach of statutory duty, negligent misstatement and/or negligent misrepresentation against the Defendant. The Defendant is a limited company which has its registered office at Coleraine in Northern Ireland.

15. On the 29th March, 1994 a firm of solicitors carrying on practice at Ballymoney, Co. Antrim wrote to Plannja Korrugal Limited on behalf of the Defendant. The letter was in the following terms:-

16. That letter was replied to on the 31st March, 1994 by Plannja Korrugal. The letter was written by David J. Baker, the General Manager of Plannja Limited. The letter was in the following terms:-

17. On the 15th April, 1994 the solicitors for Smyth Cladding Systems wrote to McNamara Ryan, the firm of solicitors nominated by Plannja Limited. The letter is in the following terms:-

18. For the sake of completeness, I should record that prior to the writing of the letter of the 15th April, 1994 the Defendant's solicitors, on the 12th April of that year, wrote to Korrugal Limited directly in precisely the same terms as they had written to Plannja Korrugal Limited on the 29th March, 1994. Korrugal Limited responded on the 22nd April, 1994 making it clear that it was not prepared to indemnify the Defendant against the claim nor was it in a position to take over conduct of the proceedings. This letter is also signed by Mr. David J. Baker and again the letter nominates the firm of solicitors in Weybridge to whom all future correspondence should be directed.

19. Insofar as Plannja Limited was concerned, the firm of McNamara Ryan replied to the Defendant's solicitor's letter of the 15th April by a letter of the 22nd April, 1994. It reads as follows:-

20. On the same day that that letter was written, namely, the 22nd April, 1994, a conversation took place between Mr. Smyth of the Defendant Company and Mr. Baker of Plannja Limited. It is alleged that Mr. Baker informed Mr. Smyth that Plannja Limited would stand behind the Defendant and would not allow it to suffer loss but that he was not willing to commit his company in writing to provide an indemnity. This much is averred to in the affidavit of James Smyth which grounded the application seeking liberty to issue the Third Party Notice. Mr. Smyth went on to aver that he took Mr. Baker at his word and forbore from taking any further steps against Plannja Limited. Mr. Baker has sworn an affidavit on this application in which he expressly denies that he informed Mr. Smyth that Plannja Limited would stand behind the Defendant and would not allow it to suffer loss. He says that he remembers the telephone conversation with Mr. Smyth very well and the only assurance which he gave to him was that Plannja Limited, which had an ongoing business relationship with the Defendant, was willing to render technical assistance to ascertain the degree of problem associated with the petrol station canopies.

21. It is impossible for me at this juncture to decide which of these two versions of the conversation is the more probably correct. In approaching this application, I will therefore assume, but will not decide, that the version deposed to by Mr. Smyth is correct.

22. Following this exchange of correspondence, the action proceeded as between Plaintiff and Defendant. A Statement of Claim was delivered on the 26th May, 1994. A Notice for Particulars was served on the 30th August, 1994. An amended Statement of Claim was delivered on the 7th February, 1995. An amended Notice for Particulars was served on the 15th February, 1995.

23. On the 10th November, 1995 the solicitors on record for the Defendant wrote to Plannja Limited and Plannja A.B. calling upon each of those entities to admit liability and to undertake to indemnify the Defendant in respect of the proceedings and all damage/loss which might be incurred arising therefrom.

24. These letters were responded to on the 16th November, 1995 by McNamara Ryan, Solicitors, acting on behalf of Plannja Limited only. They refused to offer the admission of liability or the indemnity which was sought.

25. On the 27th November, 1995 a response was received from the Corporate Legal Department of Swedish Steel which rejected liability on behalf of Plannja A.B.

26. There was some further correspondence between the 7th December, 1995 and the 7th February, 1996 between the solicitors for the Defendant and the Legal Department of Swedish Steel.

27. Ultimately a Notice of Motion was issued seeking the joinder of the Third Parties who are now before the Court. That motion was dated the 8th February, 1996 and was heard on the 4th March, 1996 when Morris J. made orders joining as Third Parties both Plannja Limited and Plannja A.B.

28. From the foregoing chronology it can be seen that by the end of April 1994 Plannja Limited was making it plain, through its solicitors, that it had no intention of providing the indemnity sought by the Defendant. Notwithstanding that, no application was made to join that entity until the motion of the 8th February, 1996 was issued.

29. The explanation which is tendered for this delay was the continued reliance by the Defendant upon the oral assurance of Mr. Baker given on the 22nd April, 1994. That continued reliance apparently came to an end in November 1995 when the Defendant was advised by solicitor and Counsel that it would be more prudent in the circumstances to obtain a formal written indemnity from Plannja Limited and/or Plannja A.B. It has not been made clear why it was only in November 1995 that such counsel of prudence was forthcoming.

30. I do not think that it was at all prudent of the Defendant to rely upon the oral assurance allegedly given by Mr. Baker on the 22nd April, 1994. It must be remembered that that alleged assurance was preceded by the letter of the 31st March, 1994 in which Plannja Limited denied any responsibility in the matter and indicated that it would not consider any costs in connection with the proceedings. Furthermore, that letter nominated the firm of McNamara Ryan, Solicitors, to act on its behalf and directed that all future contact should be made through that firm. The verbal assurance, even on the version of events given by the Defendant and which I am prepared to accept for the purposes of this exercise, was a most circumspect affair. Although Mr. Baker is alleged to have indicated that Plannja Limited would stand behind the Defendant and would not allow it to suffer loss, he was not willing to commit the company in writing to provide an indemnity. I would have thought that such an approach would have caused the Defendant to be suspicious of Plannja Limited rather than cause it to be lulled into relying on such assurance. In any event, on the same day as the conversation took place, the solicitors nominated by Plannja Limited wrote the letter of the 22nd April, 1994 which made it crystal clear that Plannja had not agreed to indemnify the Defendant. That letter, being dated the same day as the telephone conversation, was presumably received subsequent thereto and, in my opinion, put the matter beyond doubt.

31. I find no justification for the delay of one year and ten months which occurred between this correspondence and the application to join the Third Parties. Such delay was, in my view, unreasonable. It follows that the Defendant did not join and serve the two Third Parties with which I am concerned in this application as soon as was reasonably possible. It therefore follows that the Third Parties are entitled to the order which they seek and the Third Party Notices will be set aside.

32. In addition to relying upon the oral assurance of Mr. Baker given in April 1994, the Defendant also seeks to rely upon correspondence and dealings between the parties prior to the institution of proceedings. This is done in an attempt to demonstrate that the Third Parties are not prejudiced by the delay. But I am not here concerned with any question of prejudice. That is so having regard to the decisions which I have cited and, indeed, Counsel for the Defendant quite properly accepted that that was not a matter with which I ought to be concerned on this application. The sole issue which I have to decide is whether the Defendant served the relevant Third Party Notices as soon as was reasonably possible. In my view, it did not and consequently the Third Party Notices must be set aside.