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High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Window and Roofing Concepts Ltd. v. Tolmac Construction Ltd. [2003] IEHC 108 (11 December 2003)
URL: http://www.bailii.org/ie/cases/IEHC/2003/108.html
Cite as: [2004] 1 ILRM 554, [2003] IEHC 108
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The High Court
Record Number: 2001 No. 7039P
Between:
Window and Roofing Concepts Limited
Plaintiff
And
Tolmac Construction Limited
Defendants
Judgment of Mr Justice Michael Peart delivered the 11th December 2003:
By Notice of Motion dated 23rd June at 2003 the plaintiff made an application to the Master of the High Court for an extension of time within which to accept a lodgment of money, paid into court by the defendants by notice of lodgment dated the 20th day of February 2003. That application was refused by the Master on 7th October 2003, and the plaintiffs come to this court by way of appeal against that refusal by the Master.
In these proceedings the plaintiffs claimed a sum of approximately £45,000 in respect of certain window installation work undertaken by them for the defendants towards the end of 1998. By the said notice of lodgment dated the 20th day of February 2003, the defendants lodged in Court a sum of €40,764, such payment being made without any admission of liability.
In a grounding affidavit sworn on 17th June 2003 for the purposes of the application before the Master, Mr Derek May, a company director of the plaintiff company, stated that although the time-limit for acceptance of the money lodged in Court had by that time expired, the plaintiff company had had a further opportunity to reflect upon by a lodgment, and was, as of that date, of the view that the amount of the lodgment was acceptable. He also avers that plaintiff's solicitors had written on 21st May 2003 to the defendant's solicitors indicating that the plaintiffs were prepared to accept the lodgment and costs of proceedings up to the date of making of the lodgment, and asked for a letter consenting to the late acceptance of the lodgment. The defendants refused to so consent.
Under the Rules of the Superior Courts, a period of 21 days is allowed within which money lodged in court by a defendant in satisfaction of a plaintiff's claim may be accepted. In this case, the time for acceptance of the lodgment would have expired on or about 14th March 2003. The letter written by the plaintiff's solicitors to the defendant's solicitors seeking an extension of time is dated 21st May 2003, namely about nine weeks after the expiration of the time for accepting the lodgment under the Rules.
The plaintiffs accept that they are outside the time permitted by the Rules to accept the lodgment, but submit that the defendants are being unreasonable in not consenting to the late acceptance thereof. The defendants on the other hand submit that the plaintiffs had their opportunity to consider the lodgment made and could have accepted it, if they so wished, thereby avoiding the risk of bringing these proceedings to trial and failing to beat the lodgment, and that they must now live with their decision and face the risk of going to trial, or else discontinue the proceedings.
The defendants believe that the plaintiffs now realise that their case is not as strong as at first believed, and presumably feel that the plaintiffs might not beat the lodgment. The consequence of that for the plaintiffs would be that they would be unable to recover any costs of the action, even if there are successful, in respect of the period subsequent to the date of the lodgment. On the defendant's side, of course, it would mean that if the plaintiff failed to beat the lodgment, the defendant might retrieve some part of the money lodged in Court.
In considering whether the court should exercise its discretion by granting an extension of time for the acceptance of a lodgment in this case, the court must look beyond the commercial interests of the parties, and consider the wider purpose of the lodgment procedure. A public interest is served by allowing a defendant to lodge a sum of money in Court which he believes is sufficient to satisfy a plaintiff's claim. That public interest was referred to by O'Dalaigh C.J. in Ely v. Dargan (1967) I.R. 89 at 95, albeit in the context of an application by a defendant for liberty to make a late lodgment, rather than in the context of an application for an extension of time to accept a lodgment. But the principle remains the same in my view. In that case, the defendant had wished to make a late lodgment, and to save the costs of a new trial, and Counsel in that case urged that it is in the public interest that the incurring of extra unnecessary costs should not be encouraged. In relation to that submission, the then Chief Justice stated as follows:
"the defendant was right to urge that the public interest is served by allowing a Defendant, even at the eleventh hour, to proffer to the plaintiff under the lodgment machinery of the courts a sum that the defendant considers adequately meets the plaintiff's claim. But the principle of public interest does not require that a Defendant, who by leave of the court is allowed to avail of the lodgment machinery, should do so on any more favourable conditions than he would have done if he had used that machinery in the ordinary way without the Court's leave. The defendant by increasing the amount of his lodgment seeks to put himself in a more advantageous position at the trial vis-a-vis the plaintiff than he now occupies.
Cases may arise in which there are circumstances that require special consideration; but, short of this, my opinion is that in the ordinary case where a defendant wishes to increase the amount of his original lodgment he may properly be required, as the condition of obtaining liberty, to restore the plaintiff to the position in which he would have been if the increased lodgment had been an original lodgment made under the rules without leave."
This concept of the public interest has been regarded, in subsequent cases, as important in relation to applications to the court for leave to make a late lodgment. It is of equal importance in the present application since the same interest is at stake, namely the interest of avoiding unnecessary costs, and ensuring that as far as possible valuable court time is not wasted by hearing cases which do not need to be heard.
There is nothing in the Rules to suggest that it is only in very exceptional circumstances that an extension of time to accept a lodgment would be granted. There is nothing to suggest that a plaintiff who wishes to obtain such an order is required to establish a sufficient reason as to why a late lodgment was not accepted within the prescribed time. In the present case the affidavit of Mr Derek May to which I have already referred, states simply that the plaintiff has had an opportunity to reflect on the lodgment, and is now of the view that the lodgment is acceptable.
The Court therefore has a wide discretion, albeit one which must certainly not be exercised in a way which would unfairly prejudice the defendant. Under the new English Rules of Civil Procedure provision is made for a plaintiff to seek an extension of time to accept a lodgment, and in certain instances it is a matter for the discretion of the court, as opposed to being as of right. There have been a number of decisions in England which are helpful in deciding the basis upon which the court should exercise its discretion in an application of this kind. The matter is usefully dealt with in the case of Black v. Doncaster BC (1998) 3 All ER 631. Stuart-Smith LJ states at page 634:
" in what circumstances should the court exercise its discretion to make an order for payment and in what circumstances should it refuse to do so? Guidance is to be found in two decisions of the Court of Appeal under the corresponding provisions of the Rules of the Supreme Court, which are Ord 22, r5. Gaskins v. British Aluminium Co Ltd (1976) 1 All ER 208, (1976) QB 524 is the first case. That was a personal injury case. Liability was in dispute. The defendants had paid £5,500 into Court which was not accepted within the 21 days. The trial began. The first day went badly for the plaintiff and it looked as though he was going to lose. The next day the plaintiff applied to the judge to take money out of court. The defendants opposed the application and the judge refused to take the money out. The plaintiff appealed. The Court of Appeal dismissed the appeal. Lord Denning MR said……..
'I think a distinction must be drawn between an application made before the trial, and one made at or after it. When the application is made before the trial, it will usually be made to the Master. He can make an order allowing it. If the chances of success or failure - or of greater or less damages - are substantially the same as they were at the time of the payment into court, the Master may allow the payment out to the plaintiff, but he will usually allow it only on the terms that the Plaintiff pays all the costs from the date of payment into court. If the chances have substantially altered, then the Master should not allow the plaintiff to take the payment out: for the simple reason that it would be unfair to hold the defendant to a sum which he offered in different circumstances….."
That was a case where the application to take the money out was made after the trial had started. So strictly speaking that part of Lord Denning's judgment is obiter dicta.
But a similar decision was reached in Proetta v. Times Newspapers Ltd (1991) 4 All ER 46, (1991) 1 LR 337. That was libel action. The defendants made a payment into court. It was not accepted within the time-limit. The defendants' prospect of success improved when they were able to obtain evidence in support of justification. The plaintiff applied for an extension of time in which to take the money out. The judge allowed it but the Court of Appeal reversed him. Neill LJ said …………
' once there is a substantial alteration in the risks, the time for acceptance should not be extended. This was laid down in Gaskins v British Aluminium… the Court of Appeal, a decision which, in my judgment, is binding on this court.'
Then Neill LJ cites the passage from Lord Denning's judgment to which have just referred.
These are cases where the balance of risk had changed either in the course of the trial or because the defendants had obtained stronger evidence. A case where the balance of risk had altered because of a change in the law is Cumber v. Pothecary (1941) 2 All ER 516, (1941) 2 KB 58, where the law was altered by the House of Lords decision in Benham v. Gambling (1941) 1 All ER 7, (1941) AC 157 so that damages for loss of expectation of life were henceforth to be assessed on a modest and conventional method."
Another case in which there is a useful discussion of this question is Factortame v. Secretary of State for the Environment, Transport and the Regions (2002) 2 All ER 838. That case deals with a situation where a lodgment was made by the defendants and was refused by the plaintiffs. Thereafter, the defendants made a significant amendment to their case, but on the basis of information which had always been available to them. Following this amendment, the plaintiff sought an extension of time to accept the lodgment. In fact an extension of time was refused because the court felt that the amendment was simply being used as a reason for seeking an extension of time to accept the lodgment. But the case is a useful demonstration of one instance in which the court would exercise its discretion in favour of granting an extension.
In the present case, there is, relatively speaking, a small delay on the part of the plaintiff in deciding that the lodgment should be accepted. In the life of a High Court action, a period of the nine weeks is not exceptional or very significant. This is not a case in which the trial has started, nor one in which the plaintiff has taken some advantage of the defendants as a result of any negotiations which might have taken place prior to the commencement of the hearing. In fact, it is not possible to discern any possible prejudice to the defendants if an extension of time is granted for the lodgment to be accepted. It is clearly in the interests of the plaintiff that the lodgment should be accepted even though the time for doing so has expired under the rules. The defendant's refusal to consent to this late acceptance of the lodgment is unreasonable, and would seem to me to be a symptom of some continuing animosity between the parties, rather than being justifiable on any objective or rational basis.
As I have said, the public interest is an important consideration in the lodgment procedure. I have always believed that the Rules of the Superior Courts should, as far as possible, be construed so as to enable things to be done, rather than to prevent things from being done. They are a framework within which litigation is to be conducted, and they are an enabling set of rules rather than a disabling set of rules.
It is clear to me that in the absence of any prejudice established by the defendants, this is an appropriate case in which to exercise the court's discretion in favour of granting an extension of time to accept the lodgment made on 20th February 2003 and I so order.
But in doing so, the plaintiff shall be entitled to its costs of the proceedings only up to the 20th of February 2003, and the Defendant shall be entitled to any costs incurred by them from that date until the 30th May 2003, in view of the fact that the plaintiff's solicitors wrote a letter dated 21st May 2003 in which they sought the extension of time for late acceptance of the lodgment.
However, I will make no order for costs in respect of this motion. As far as the plaintiff is concerned, they ought to have made their decision to accept this lodgment within the time and since they did not do so, they cannot expect to receive the costs of this motion, in spite of my finding that the defendants unreasonably withheld their consent. As far as the defendants are concerned, I do not think it is appropriate to award them the costs of this motion since I believe that it was unreasonable for them to withhold their consent to the late acceptance of this lodgment, thereby forcing the plaintiff to bring this otherwise unnecessary application.