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Cite as: [2000] 2 ILRM 226, [1999] IESC 76, [2000] 1 IR 345

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Connolly v. Casey [1999] IESC 76; [2000] 1 IR 345; [2000] 2 ILRM 226 (17th November, 1999)

THE SUPREME COURT

Record No. 1274 P/1995

227/98

Hamilton C.J.

Denham J.

Keane J.

BETWEEN

KATRINA CONNOLLY

PLAINTIFF

AND

JAMES A. CASEY AND LAURA MURPHY TRADING UNDER THE STYLE AND TITLE OF CASEY AND MURPHY, SOLICITORS

DEFENDANTS/APPELLANTS

AND

MICHAEL FITZGIBBON

THIRD PARTY/RESPONDENT

Judgment of The Hon. Mrs. Justice Denham delivered the 17th day of November, 1999 [Nem. Diss.]

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1. This is an appeal by the defendants/appellants (hereinafter referred to as “the defendants”) from the Order of the High Court (Mr. Justice Kelly) made on 12th June, 1998, and perfected on 23rd July, 1998, which granted the third party’s application for an Order setting aside the third party proceedings issued herein.

Facts

2. The defendants, who are solicitors, are being sued by the plaintiff for professional negligence. The defendants joined the third party, who is a barrister. The third party brought an application (which in its correct form was) to set aside the third party proceedings pursuant to Order 16 Rule 8(3) of the Rules of the Superior Courts. The basis for setting aside the third party application was the alleged failure by the defendants to comply with the obligations imposed upon them by Section 27(1)(b) of the Civil Liability Act, 1961, to serve the third party notice as soon as reasonably possible.

3. The Plenary Summons was issued on 21st February, 1995. The statement of claim was delivered on 3rd March, 1995. On 16th February, 1996, there was notice of change of solicitor. On 14th March, 1996 the solicitor for the defendants sought further and better particulars. On 22nd April, 1996 the defence was delivered. On 14th January, 1997, the solicitors for the plaintiff replied to the request for particulars. On 6th February, 1997, there was a notice of trial. (In fact there was a second notice of trial on 13th January, 1998.) On 7th April, 1997 the affidavit was sworn grounding the motion seeking liberty to issue and serve a third party notice on the third party. On 25th July, 1997, the motion seeking liberty to issue and serve third party proceedings was issued. On 20th October, 1997, the High Court (Kinlen, J.) ordered that the defendants be at liberty to issue and serve a third party notice

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herein on Michael Fitzgibbon, the proposed third party. On 19th January, 1998 an appearance was entered for the third party. On 21st January, 1998 the motion seeking relief for the third party’ determined by the High Court to be the relief of setting aside the third party notice, was issued. On 12th June, 1998, the High Court (Kelly, J.) set aside the third party notice. It is against that order that the appeal has been brought.

Submissions

4. Counsel on behalf of the defendants, Mr. Paul Gallagher, S.C., submitted that there were two net points on the appeal. The first matter was whether the third party notice was served “as soon as is reasonably possible”. I will address this matter first as it was the basis for the High Court decision.

The Law

5. Order 16 Rule 8(3) of the Rules of the Superior Courts states:

“The third-party proceedings may at any time be set aside by the Court”.

Section 27(1) of the Civil Liability Act, 1961, states:

“(1) A concurrent wrongdoer who is sued for damages or for contribution and who wishes to make a claim for contribution under this Part-

(a) shall not, if the person from whom he proposes to claim contribution is already a party to the action, be entitled to

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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.”

(The underlining is added for emphasis.)

6. The case is grounded on s.27(1)(b). In Board of Governors of St. Laurence’s Hospital v. Staunton [1990] 2 IR 31 at p.36 Finlay, C.J., said of s.27(1)(b):

“I am quite satisfied upon the true construction of that sub-section that the only service of a third-party notice contemplated by it and, therefore, the only right of a person to obtain from the High Court liberty to serve a third-party notice claiming contribution against a person who is not already a party to the action, is a right to serve a third-party notice as soon as is reasonably possible.”

7. In the High Court the learned trial judge stated:

“The net question which I have to decide in the present case is whether the service of the Third Party Notice in the instant case was effected as soon as was reasonably possible.”

8. The learned trial judge analysed several periods of delay. The first was that between the delivery of the statement of claim on 3rd March, 1995, and the decision of the defendants’ underwriters confirming they were on cover. I agree with his conclusion that this

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delay could not be regarded as unreasonable. The next period of delay was between that decision on 30th June, 1995 of the underwriters and service of a notice for particulars on 14th March, 1996. The explanation was one of human error and the learned trial judge held that whilst the delay was significant it did not in all the circumstances appear unreasonable. I am in agreement with his conclusion. Thus the next alleged delay falls to be considered.

9. The defence was delivered on 22nd April, 1996. It had pleas in it making it clear that the defendants were alleging negligence and breach of duty on the part of the third party in respect of the advice he gave concerning the institution of proceedings against the Eastern Health Board.

Kelly, J. stated:

“The insertion of these pleas in the defence suggests to me that at the time of its delivery the Defendants were possessed of sufficient information to justify the inclusion of such a plea. An allegation of professional negligence is a serious matter and ought not to be made unless there are reasonable grounds for so doing. I do not believe that either Counsel who signed the defence would have done so unless they were satisfied that such grounds did exist. Given therefore that the Defendants were in a position to make such a plea as far back as April 1996, what is the explanation proffered for the delay between that date and the service of the Third Party Notice on the 29th October, 1997?”

10. Two explanations were given:

(1) that the defendants had to await the delivery of replies to particulars before they could move to join the third party; and

(2) the necessity to obtain a statement from Mr. Murphy prior to the bringing of an application to join the third party.

11. In relation to the first explanation the learned trial judge stated, having analysed the replies to particulars,

“I find it difficult to ascertain the information contained in this reply which added to the Defendants’ state of knowledge so as to make

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possible what had previously not been possible, namely, the preparation of the application to join the Third Party. I do not see that these replies materially altered the Defendants’ state of knowledge from what it had been before in respect of any matter of relevance concerning the joinder of a Third Party. Accordingly, on this aspect of the matter I do not consider that the Defendants have provided a satisfactory explanation for the delay in question.”

12. This was the wrong test. The test is whether it was reasonable to await the replies to particulars. Whether the replies did or did not materially alter the defendants’ state of knowledge is not the test. The queries raised in the notice for particulars were relevant to the claim against the third party and thus it was reasonable to await the replies.

13. The second reason given for the delay was the necessity to obtain a statement from Mr. Murphy prior to the bringing of the application to join the third party. This is an action for professional negligence. The defendants wished to join the third party, a barrister. Mr. Murphy was the instructing solicitor, the solicitor who instructed the third party. The learned High Court judge considered that the defendants were not justified in waiting for Mr. Murphy to co-operate and give a statement before moving to join the third party. In my view this was an error.

14. Even though there were pleas in the defence relevant to the third party’ there is a difference between a general plea in a defence and swearing an affidavit setting out the basis on which it is alleged Counsel was negligent. A statement from Mr. Murphy was relevant to this. It was not unreasonable to have sought a statement from Mr. Murphy and awaited its arrival, it was a prudent action.

15. It is important in professional negligence cases to act reasonably. Proceedings must have an appropriate basis. Counsel have a duty of care. Reference has already been made to the need to develop modern case management in cases relating to professional

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negligence; Cooke v. Cronin and anor. , (Unreported, Supreme Court, 14th July, 1999) [FL1641]. The determination that the delay of the defendants was not unreasonable in this case does not include an endorsement of a culture of delay. Rather, while determining that it was not unreasonable to seek and obtain a statement from Mr. Murphy, the whole case and the length of the proceedings illustrate the necessity of considering the introduction of modern case management in cases relating to professional negligence.

16. Another delay referred to by the learned trial judge was that between the date of swearing of the affidavit to join the third party and the issue of the Notice of Motion. He pointed out that no explanation was given for this delay. In the overall circumstances I am satisfied that this delay alone would not be such as to justify setting aside the Notice of Motion.

17. In analysing the delay - in considering whether the third party notice was served as soon as is reasonably possible - the whole circumstances of the case and its general progress must be considered. The clear purpose of the subsection is to ensure that a multiplicity of actions is avoided; see Gilmore v. Windle [1967] IR 323. It is appropriate that third party proceedings are dealt with as part of the main action. A multiplicity of actions is detrimental to the administration of justice, to the third party and to the issue of costs. To enable a third party to participate in the proceedings is to maximise his rights - he is not deprived of the benefit of participating in the main action.

18. The defendants brought a motion in the proceedings to adduce further evidence in the form of an affidavit dated 5th August, 1998 by Eugene O’Sullivan. Mr. Rory Brady, S.C., on behalf of the defendants, quite rightly, did not object. A further explanation for the delay is given there in paragraph 4 which states:

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“I say that there was pressure to file a Defence in this case because the time for filing the Defence had expired. I requested Junior Counsel to draft a Defence and to have it settled by Senior Counsel. Senior Counsel advised that on the basis of the information contained in the brief there was a sufficient basis to justify making a plea regarding the negligence of Counsel. Senior Counsel pointed out that if the plea was not contained in the Defence we would have to apply at a later stage to amend the Defence and that that application would not necessarily be granted. Senior Counsel advised however that while the evidence available justified making the aforesaid plea in the Defence, he thought it appropriate before swearing an Affidavit to seek to join the counsel as a third party, that specific confirmation of the matters contained in the brief should be obtained from Mr. Murphy and that we should be certain that Mr. Murphy would be prepared to stand over the allegations which would be contained in the Affidavit. In that regard he advised that a detailed statement should be obtained from Mr. Murphy as he had had the direct dealings with Counsel. Because of the difficulties in obtaining the statement from Mr. Murphy ... there was a delay in joining counsel as a third party.”

19. This information confirms my view that it was not unreasonable to await the statement of Mr. Murphy and that it was not an unreasonable delay. Taking the circumstances and the proceedings as a whole I am satisfied that proceedings were served within the time frame permitted as reasonable under Section 27(1)(b) of the 1961 Act. Consequently I would allow the appeal.

20. Counsel for the plaintiff had a second argument. He raised a query as to the effect, so far as the third party proceedings are concerned, of a failure to serve the third party proceedings “as soon as is reasonably possible”. This matter was not raised or argued in, nor did it form part of the judgment of, the High Court. Nor was it raised explicitly on the Notice of Appeal. Counsel for the defendants submitted that a proper reading of Section 27(1)(b) of the 1961 Act does not require the Court in the event of delay to set aside the third party notice. Rather, the Court has a discretion, he submitted, to refuse to make an Order for contribution. It was argued that it was clear from the wording used that this discretion exists

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not only where the claim for indemnity/contribution is brought by way of separate proceedings but also where it is brought by way of third party notice. He referred to the last sentence of Section 27(l)(b) of the 1961 Act which begins:

“If such third-party notice is not served as aforesaid ...“

21. Counsel submitted that what is “said before” is that the third party notice should be served “as soon as is reasonably possible”. He submitted that the interpretation contended for is not only consistent with the wording of the subsection but is also consistent with the statutory purpose of avoiding a multiplicity of actions. It is not necessary to determine this second ground submitted by the defendants in light of the decision on the first ground. Nor is it necessary, therefore, to analyse this argument in relation to The Board of Governors of St. Laurence’s Hospital v. Staunton [1990] 2 IR 31.

22. In conclusion, I would allow the appeal of the defendants on the grounds that the delay of the defendants was not unreasonable and that in the circumstances of the case the third party notice was served “as soon as is reasonably possible”. However, this is a case with particular facts in a suit alleging professional negligence and the decision does not endorse delay - rather it seeks to encourage a modern management of litigation to avoid a multiplicity of suits.