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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Andrews Construction Ltd -v- Lowry Piling Ltd [2010] IEHC 276 (13 July 2010)
URL: http://www.bailii.org/ie/cases/IEHC/2010/H276.html
Cite as: [2010] IEHC 276
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Judgment Title: Andrews Construction Ltd -v- Lowry Piling Ltd Composition of Court: Judgment by: Hedigan J. Status of Judgment: Approved |
Neutral Citation Number: [2010] IEHC 276 THE HIGH COURT 2006 4349 P ANDREWS CONSTRUCTION LIMITED PLAINTIFF AND
LOWRY PILING LIMITED DEFENDANT JUDGMENT of Mr. Justice Hedigan delivered on the 13th July 2010
1. The defendant in the proceedings herein applies in this motion to strike out the proceedings on the grounds of inordinate, inexcusable and unreasonable delay. At the hearing of the motion, the application was based primarily upon the ground that the plaintiff herein, having been sued in other proceedings by homeowners in respect of houses purchased by them from the plaintiff did not join the defendant as third party in those proceedings. They settled those proceedings without any participation by the defendant and without reference to them. They now seek indemnity in these proceedings for the loss incurred in settling those proceedings.
The Parties
3. The defendant company operates a piling business. It was contracted by the plaintiff to carry out piling works on the development in question. The piling works involved driving a column of wood or steel into the ground to provide support for a the houses in question.
The Facts
5. The plaintiff retained DBFL Consulting Civil and Structural Engineers (“DBFL”) to report on the defects in the houses. An initial inspection report, based on a purely visual inspection, was prepared by Mr. Paul Forde, Consultant Engineer, and is dated the 9th June, 2003. The walls of the properties were not opened up or stripped out for the purpose of this inspection. Mr. Forde’s report concluded that the most likely cause of the cracking in the walls had been the failure or, at least the partial failure, of the pile beneath the junction of the rear wall with the party wall. To ensure that no further cracking occurred, Mr. Forde advised that it would be necessary to install remedial underpinning piles in the vicinity of the rear wall junction with the party wall. He also suggested that Lowry Piling Limited be requested to submit remedial proposals. The letter stated inter alia as follows:-
6. Around this time the defendant herein was aware of the structural defects in the properties and the investigations which were taking place. It carried out its own investigations and ultimately its consultants, O’Connor Sutton Cronin, Consulting Structural Engineers produced a report dated the 9th September, 2005. This report was furnished to the plaintiff on the 19th May, 2006, a synopsis of that report having been forwarded to the plaintiff some months earlier in a letter from the defendant’s insurers, by letter dated the 22nd November, 2005. The tenor of the report was that there were other reasons for the settlement that occurred in the foundations apart from the piling works.
7. In a letter dated the 5th December, 2003, DBFL confirmed its recommendation contained in its initial report of the 9th June, 2003 that remedial works comprising of the installation of underpinning piles should be carried out.
8. On the 20th March, 2004, the defendant sent a potential remedial solution by fax to DBFL. This potential solution was referred to in a report of DBFL dated the 31st March, 2004. A joint inspection between the defendant and DBFL was also carried out and is alluded to in another report of DBFL dated the 3rd February, 2005. In the letter from the defendant’s insurers to DBFL dated the 22nd November, 2005, it was indicated that the defendant did not accept liability for the defects that had arisen as follows:-
9. The proceedings involving the homeowners were compromised in December 2004, by letter dated the 21st December, 2004, to the owners of 119 Petitswood Manor and by letter dated the 17th December, 2004, to the owner of 120 Petitswood Manor in full and final settlement. As part of the settlement the plaintiff agreed to provide alternative houses to the owners of the properties and to pay damages and legal expenses. The total sum of the settlement paid by the plaintiff was €448,792.68.
10. On the 19th September, 2006, the plaintiff issued a plenary summons seeking an indemnity or, in the alternative, a contribution in respect of its losses together with other reliefs against the defendant. An appearance was entered by the defendant on the 1st November, 2006. A statement of claim was then delivered by the plaintiff on the 11th May, 2007. The defendant issued a notice for particulars on the 13th September, 2007, and received replies on the 8th February, 2008. A defence was delivered on the 30th January, 2008. A notice of intention to proceed was served by the plaintiff’s solicitors on the 11th March, 2009, and a notice for trial was served on the 15th April, 2009.
The parties’ submissions 12. Mr. Mullooly B.L., for the plaintiff, contends that the cause of the damage to the houses had not been fully investigated or ascertained before the settlement of the proceedings between his client and the homeowners. It was only when the cause of the damage became known that the plaintiff instituted these proceedings against the defendant. He argues that the decision to settle the claims by the homeowners was in accordance with the plaintiff’s duty to mitigate its loss, that the defendant had not been prejudiced by those settlements and that the defendant’s experts’ report was only furnished to the plaintiff on the 19th May, 2006.
13. He conceded that whilst a claimant is not precluded from making an indemnity or contribution claim by separate action, such a claim may be refused as a matter of discretion. In exercising this discretion that a Court should consider why a third party notice was not served and whether there were good reasons for it not being served in accordance with s.27 of the Civil Liability Act 1961, as held in ECI European Chemical Industries Limited v. MC Baucheie Muller GmbH [2006] IESC 16. He referred to the comments of Peart J. in Tuohy v. North Tipperary County Council [2008] IEHC 63 who held in that case that time ran from when the plaintiff was first in a position to know that the claim against the defendant was possible to pursue. The complex structural investigations and issues on the facts of this case were emphasized and he submitted that these had a bearing on the time the proceedings were brought.
The Law
(a) shall not, if the person from whom he proposes to claim contribution is already a party to the action, be entitled to claim contribution except by a claim made in the said action, whether before or after judgment in the action; and (b) shall, if the said person is not already a party to the action, serve a third-party notice upon such person as soon as is reasonably possible and, having served such notice, he shall not be entitled to claim contribution except under the third-party procedure. If such third-party notice is not served as aforesaid, the court may in its discretion refuse to make an order for contribution against the person from whom contribution is claimed.” Decision
(ii) The onus lies on the concurrent wrongdoer/defendant to prove that it acted “as soon as is reasonably possible”. (See McElwaine v. Hughes (Unreported, High Court, Barron J., 30th April, 1997) and Dillon v. MacGabhan (Unreported, High Court, 24th July, 1995). (iii) In determining what the phrase means, ‘as soon as is reasonably possible’, all the facts of the case have to be taken into account. (See Connolly v. Casey (supra) and Molloy v. Dublin Corporation [2001] 4 IR 52.) (iv) An element of caution is required before a third party notice is served especially where an allegation of professional negligence is involved. (See Connolly v. Casey (supra) and Greene v. Triangle Developments Ltd. [2008] IEHC 52.) (v) If a concurrent wrongdoer/defendant does not serve a third party notice ‘as soon as is reasonably possible’ (or at all), he may still maintain an independent action at a later date after the determination in the substantive claim, but in that event the court reserves a discretion to refuse a contribution if it thinks it is appropriate to do. (See s. 27(1)(b) and Board of Governors of St. Laurence’s Hospital v. Staunton (supra).)”
‘Clearly the words ‘as soon as reasonably possible’ denotes that there should be as little delay as possible, nevertheless, the use of the word ‘reasonable’ indicates that circumstances may exist which justify some delay in the bringing of the proceedings.” On the facts of the case before him Murphy J. found that there was delay in instituting proceedings and he proceeded to dismiss the appeal brought by the second named defendant challenging the decision of the High Court to set aside the third party order on the basis of the second named defendant’s delay.
17. In ECI European Chemicals Industries Limited v. McBauchemie Muller GmbH and Company [2006] IESC 15. Geoghegan J. considered an appeal against an order to set aside a third party notice on the grounds that it had not been served “as soon as is reasonably possible” within the meaning of s.27(1)(b) of the Civil Liability Act, 1961. He considered the import of s.27 (1)(a) and (b) as being as follows:-
Geoghegan J., having considered the relevant authorities, accepted that it would be permissible in some cases for a defendant to make a third-party claim otherwise than by a third party notice, in a separate action. He went on to examine the circumstances in which a court should exercise its discretion to reject the proceedings. In this regard he stated as follows:-
… There was no evidence of prejudice in this case and, therefore, the issue of prejudice does not arise. My view, which would itself be obiter, would be that procedural prejudice only would be relevant. I would reiterate however that the prejudice issue, if it arises at all, only arises after the court is satisfied that there was a good reason why the third-party notice was not served in accordance with the Act and in that connection any matter already decided on an application to set aside the third-party notice must be treated as res judicata.” 18. From the above, it is clear that prejudice to the defendant in proceedings was not deemed by Geoghegan J. to be a necessary ingredient to establish that a claim against a defendant should be dismissed and indeed he held that it only fell to be considered after it had been found that there was a good reason why the third-party notice was not served in accordance with the Act of 1961.
19. In Cedardale Property Co. Ltd. & Ors v. Deansgrange Development Ltd & Ors (Unreported, High Court, 13th November, 2008), Irvine J. stated:-
20. A third party notice was not served on the defendant in the original proceedings. In considering whether this Court should exercise its discretion under s.27 (1)(b) of the Act of 1961 the circumstances of the case as a whole must be taken into account. The evidence in this case demonstrates that the plaintiff was aware that there was a serious issue with the piling works that had been undertaken on the two properties in the development as early as the 9th June, 2003. Although, the plaintiff now makes the case that the cause of the damage did not fully come to light until after the settlement of the original proceedings, it is clear from the report of its own consultants that problems with the piling works had been identified and that specific remedial works were recommended. It is clear the plaintiff was aware at that time that the defendant herein was most likely to be directly involved in the causation of the problem. Notwithstanding this, the plaintiffs did not proceed to join the defendants in those proceedings. They, instead, proceeded to settle the case with the homeowners in December 2004 and did not issue proceedings against the defendant until the 19th September, 2006. The defendants, though aware of the proceedings the home owners had taken against the plaintiff, were not involved. The case was settled without any participation by them or reference to them. This despite the fact they had been actively involved with identifying the cause of the cracking in the walls and in proposing a remedial solution.
21. I am satisfied that in these circumstances the justice of this case lies in favour of a finding for the defendant. The plaintiff in my view acted unreasonably in not seeking to join the defendant to the original proceedings once it had received the report from DBFL of 9/6/03. Due to this the defendant was deprived of an opportunity to participate in the defence and settlement of the case. In the light of this finding it is not necessary to deal with the issue of prejudice to the defendants. Nonetheless I think it is appropriate to note that the defendants herein are prejudiced by the delay ipso facto in involving them in this dispute by reason of the ten years that has elapsed to date. I think it would have been far preferable for both plaintiff and defendant herein had a third party notice been served as soon as the first proceedings were served on the plaintiff herein. On the evidence then available to the plaintiff it could reasonably have done so. Nothing in the evidence before the court suggests it would have been any less likely that the case could have been settled when it was had the defendant been involved at that time. No good or sufficient reason has been advanced by the plaintiff as to why a third party notice was not served. In the result, on the basis of the judgment of the Supreme Court in the ECI case, I find that the court ought not to exercise its discretion in allowing the plaintiff proceed in separate proceedings. The motion is allowed.
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