High Court of Ireland Decisions

1. This is an application by way of appeal from the Master of the High Court for an Order substituting Vriesveem "De Drie Haringen" B.V. as Plaintiff in substitution for B.V. Kennemerland Groep. The Defendants are a firm of solicitors who were engaged by a Dutch company to carry on Irish litigation. A sum of £25,000 was paid to the Defendants by their client. But there is a dispute as to whether that payment was for the purpose of discharging costs already owed or for the purposes of new intended litigation which never ensued. The Dutch client company was originally called Rederij Kennemerland B.V. and was a subsidiary of the presently named Plaintiff. The name of the client company was changed in 1994 to Maarten Ederveen IV B.V. ("Maarten"). Subsequently, Maarten merged with the company now sought to be substituted as Plaintiff and all assets and liabilities of Maarten became transferred to that company. The claim against the Defendants is that the money should be returned as it was intended for litigation which never occurred and it is suggested that it has been held by the Defendants in trust ever since. The Defendants not only dispute the purpose of the payment of the monies as I have already explained but claim that any action to recover them is long statute barred.

2. It is not seriously in dispute that the proceedings which were instituted on the 19th of September, 1997 were brought in the name of the wrong Plaintiff due to a bona fide error. As to how this error arose is fully explained in the Affidavit of Mr. Terry Leggett, Solicitor of Eugene F. Collins & Co. and particularly in paragraph 7 of his supplemental Affidavit sworn 1st October, 1998. It is perfectly clear that the Defendants would have at all material times known that the wrong company was the Plaintiff and furthermore they themselves in correspondence regularly used the name of the parent company i.e. the incorrect Plaintiff.

3. Order 15 Rule 2 of the Rules of the Superior Courts provides as follows:-

4. I am absolutely satisfied that subject only to the problem of statute bar, justice requires that I make the substitutions sought. I am further satisfied that I am entitled to do this under Order 15 Rule 2 and that that is the appropriate rule in this instance rather than Rule 13.

5. The Defendants submit, however, that I ought not to substitute a new party under the rule if the action at the suit of that new party is statute barred. In this connection the Defendants particularly rely on the judgments of the Supreme Court in Allied Irish Coal Supplies -v- Powell Duffryn International Fuels Limited [1998] 2 I.L.R.M. 61. The first point to be made about that case is that it was dealing with an application to add a defendant under Order 15 r.13 of the rules of the Superior Courts and not under Order 15 r.2. Murphy J. in delivering the principal judgment of the Court said the following at p.69:

6. For reasons which I will elaborate on, I think that Murphy J. was referring to a case where the action was quite clearly and beyond argument statute barred. If that is not the case the decision in Allied Irish Coal -v- Powell Duffryn would appear to be in conflict with an earlier decision of the Supreme Court, namely, O'Reilly -v- Granville, [1971] I.R. 90. Shanley J. considered this problem in Southern Mineral Oil Ltd -v- Cooney, [1998] 2 I.L.R.M. 377. He observed at p.382 as follows:

7. Shanley J. went on to conclude that he was bound to follow the later decision of the Supreme Court. However, I interpret him as meaning by that that if and insofar as there was a relevant conflict between the two decisions he would have to follow the later one. I of course would also accept that that would be so. But Shanley J. analysed O'Reilly -v- Granville and demonstrated that that was a case where there could have been answers to the plea of the statute. Indeed he goes on to quote Budd J. as stating the following:

8. It is not therefore entirely clear to me that Shanley J. considered the two decisions irreconcilable. If he did, I would respectfully beg to differ. It would seem somewhat doubtful in the first instance as to whether O'Reilly -v- Granville was ever cited to the Supreme Court in Allied Irish Coal Supplies -v- Powell Duffryn International Fuels Limited because it seems surprising that there is no reference to that decision in the judgments of either Murphy J. or Barron J. But at any rate I think it highly unlikely that the Supreme Court in Allied Irish Coal would have been intending to overrule O'Reilly -v- Granville without actually saying so, particularly having regard to the detailed analytical judgments in that case. I think therefore that Allied Irish Coal Supplies -v- Powell Duffryn International Fuels Limited is simply a restatement of a long established principle that a Court will not add a defendant under Order 15 Rule 13 if the action is quite clearly statute barred. I do not think that it can be taken as authority for the proposition that if there is doubt as to whether a plea of the statute would be successful or not, the Court making the decision as to whether to join the additional party or not has to there and then decide the statute bar issue and accede to or refuse the application accordingly. But at any rate I do not think that the principles which apply in relation to an application under Order 15 r.13 necessarily apply equally to an application under Order 15 r.2. For instance, in the case of O'Reilly -v- Granville Walsh J. expressed a minority view that for Statute of Limitation purposes an added defendant would be deemed to have been sued at the date of issue of the proceedings. There may be arguments that that would be the correct view in relation to the substitution of a plaintiff under Order 15 r.2. But there are numerous issues in relation to statute bar in this case. There is the question of whether the action would at any rate have been statute barred even if the correct Plaintiff had been joined from the start. There may be issues as to whether the action would not have been statute barred had the correct Plaintiff been joined at the start but would be statute barred if the action by the substituted Plaintiff is deemed to commence from the date of any Order that I might make joining him. There are further arguments as Mr. O'Donnell pointed out as to whether at any rate there might be answers to the plea of the Statute of Limitations on the basis of an alleged express trust in relation to the monies or on the basis of concealment or on the basis of estoppel. In my view it is totally inappropriate unless I was bound to do so by authority to determine these matters at this stage. I am satisfied that I should make the Order sought and if and when the Defendants plead the Statute of Limitations the other issues can then be tried. In case there should be misunderstanding I would add that even in a case under Order 15 r.2, I would accept that the Court has a discretion to refuse to make the Order on the grounds that it would be futile in practice if the action would be statute barred beyond any doubt. But that is far from the case here. I will therefore make the Order under O.15 r.2 of the Superior Court Rules and set aside the Order of the Master.