Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
Court of Appeal in Northern Ireland Decisions
You are here: BAILII >> Databases >> Court of Appeal in Northern Ireland Decisions >> McGoldrick v Gilmore & Ors [2001] NICA 53(2) (14 December 2001)
URL: http://www.bailii.org/nie/cases/NICA/2001/53(2).html
Cite as: [2001] NICA 53(2)
[New search] [Printable RTF version] [Help]
| Neutral Citation no.[2001] NICA 53(2) | Ref: | CARC3543 |
| Judgment: approved by the Court for handing down | Delivered: | 14.12.2001 |
| (subject to editorial corrections) |
BETWEEN
CARSWELL LCJ
This is an appeal against an order of McLaughlin J made on 16 February 2001, allowing the appeal of the plaintiff against an order of Master Wilson dated 30 January 2001, whereby he ordered, pursuant to RSC (NI) 1980, Order 18, rule 19 and under the inherent jurisdiction, that the indorsement on the writ of summons be struck out in so far as it alleged negligence and breach of statutory duty against the appellant and claimed damages from him. Leave to appeal was granted by this court on 8 March 2001.
The plaintiff Michael McGoldrick claims in this action that on 24 September 1997 he sustained personal injuries, loss and damage in consequence of a fall from scaffolding when he was working on the construction of a dwelling house at Movanagher Road, Kilrea, County Londonderry. The basic facts are set out in paragraph 4 of the affidavit sworn on behalf of the plaintiff by his solicitor Mr Liam McNally:
"I am advised by the Plaintiff and verily believe that Mr and Mrs Darragh had agreed with Mr Gilmore that they would pay a sum of £2,400.00 for the brick-laying work to be carried out at the bungalow that was being built for Mr Darragh. Mr Darragh was to supply all the scaffolding, all the materials and equipment and was also to provide insurance in respect of anyone working on the building. Mr Gilmore then sought assistance from the Plaintiff and paid the Plaintiff in relation to the work that he carried out on the site. It was in the course of this work that the Plaintiff was injured."
According to Mr McNally's affidavit the plaintiff gave instructions to make a claim for damages against Mr and Mrs Darragh , but that as he was a friend of the appellant Eamon Gilmore he did not wish to bring proceedings against him. His solicitors Messrs John J McNally & Co wrote to the appellant on 22 June 1999 in the following terms:
"We act on behalf of Michael McGoldrick of 76 Oldtown Road, Castledawson in relation to an action for personal injuries arising out of an accident on 24th September 1997.
We are instructed by our client to confirm to you that he does not intend to take any action against you or include you in any action for compensation for the personal injuries loss and damage sustained on 24th September 1997 whilst working on a new bungalow for Declan Darragh at Movangher Road, Kilrea.
In view of the above confirmation we would be grateful if you would contact our offices and advise if you would/would not be willing to provide a witness statement. In the event that you would please arrange an appointment with our Ms Kelly.
We await hearing from you as soon as possible."
The appellant did go to the offices of the plaintiff's solicitors and there made a written statement and, according to his affidavit, answered questions about the accident. He was understandably more than a little surprised and annoyed when over a year later he received a further letter from the plaintiff's solicitors, dated 29 August 2000, alleging that he had been guilty of negligence and breach of statutory duty and calling on him to admit liability and pay the plaintiff damages. The appellant replied through his solicitors by letter dated 27 September 2000, protesting that the plaintiff was estopped from pursuing a claim against the appellant and asking for confirmation that the letter of claim was issued in error. The plaintiff's solicitors replied curtly by letter dated 2 October 2000 that their letter of 29 August was not a mistake, and followed that up by serving upon him the writ of summons in the action, which had been issued on 19 September 2000. Their reasons for commencing proceedings against the appellant, notwithstanding the assurance given in their letter of 22 June 1999, are set out in paragraph 6 of Mr McNally's affidavit:
"Following the letter of 22nd June 1999 I have obtained Opinions from Junior Counsel and Senior Counsel in relation to the Plaintiff's course of action. I have been advised by Senior Counsel and verily believe that the Plaintiff should commence proceedings against Mr Gilmore to ensure that he has correctly joined the relevant parties that may be liable to him in respect of compensation for his injuries. I am advised and verily believe that the Court may construe Mr Gilmore to have been the Plaintiff's employer rather than Mr Darragh and as such the principal duty in relation to compliance with Statutory Regulations regarding the provision of safe scaffolding at the building site lay with him. It is on that basis that the Plaintiff has joined Mr Gilmore as a party to this action."
The appellant brought a summons for an order striking out the indorsement on the writ of summons as against him, and on 30 January 2001 Master Wilson made an order to this effect, on the ground that to join the appellant as a defendant in the circumstances of the case was an abuse of the process of the court. The plaintiff appealed to the judge, and on 16 February 2001 McLaughlin J allowed his appeal and dismissed the summons. He held, first, that since there was nothing in the statement taken by the plaintiff's solicitors from the appellant which they did not already know, the joinder of the appellant was not an abuse of the process of the court. Secondly, the plaintiff was not estopped from joining the appellant, since the appellant had not changed his position irretrievably to his detriment. The judge also ordered that the plaintiff's solicitors hand over "all original attendance notes" to the appellant's solicitors and that no use be made of them at trial.
The jurisdiction to strike out claims as being an abuse of the process of the court has always been exercisable under the inherent jurisdiction of the court and is now expressly contained in Order 18, rule 19. Notwithstanding the enactment of the latter rule, the inherent jurisdiction continues to exist. The ambit of the power is conveniently summarised in The Supreme Court Practice, 1999, paragraph 18/19/18:
"This term connotes that the process of the Court must be used bona fide and properly and must not be abused. The Court will prevent the improper use of its machinery, and will, in a proper case, summarily prevent its machinery from being used as a means of vexation and oppression in the process of litigation … The categories of conduct rendering a claim frivolous, vexatious or an abuse of process are not closed but depend on all the relevant circumstances and for this purpose considerations of public policy and the interests of justice may be very material."
Mr Park on behalf of the plaintiff disclaimed any intention on the part of the plaintiff or his solicitors to trick or mislead the appellant, and the appellant's counsel Mr McBrien did not attempt to dispute this. It may have been an unusual and perhaps misguided course for the solicitors to take – and certainly this court would strongly discourage practitioners from attempting to follow it in other cases – but it was done openly, in the honest intention at the time to avail of the appellant as a witness and not to join him in the proceedings. The decision to join him was made on the subsequently received advice of senior counsel, who took the view that it could possibly have left the plaintiff without a remedy if the appellant had not been joined along with the Darraghs. Mr Park also submitted that examination of the appellant's statement showed that he was not prejudiced by anything which he related to the solicitors, nor was there anything in the statement of which they would not already have been aware.
In my opinion the two factors upon which the plaintiff's counsel relied are crucial in a case of this nature. If there had been any savour of sharp practice or if the statement made by the appellant had been in any respect to his detriment, I should have regarded the joinder of the appellant as an abuse of the process of the court. Although the thorough researches of counsel and ourselves have not unearthed any comparable case, I am satisfied that the jurisdiction is quite wide enough to justify striking out the relevant part of the indorsement on the writ of summons if either of those conditions were satisfied. Having considered the terms of the statement carefully, however, I do not consider that the appellant has been prejudiced by his co-operation in making the statement and I am in agreement with the learned judge's conclusion on this issue.
The case for the appellant was founded in the alternative on the principle of equitable estoppel. It was submitted that the plaintiff by his representation contained in his solicitors' letter of 22 June 1999 had promised not to sue the appellant in respect of the accident, and that in reliance upon that representation the appellant had altered his position to his detriment by attending at the solicitors' offices and making a statement about the accident. It would therefore be inequitable to allow the plaintiff now to go back on his promise and claim damages from the appellant.
The fons et origo of the doctrine known as promissory estoppel or estoppel by representation, a species of the genus known as equitable estoppel, is to be found in the speech of Lord Cairns LC in Hughes v Metropolitan Railway Co (1877) 2 App Cas 439 at 448, where he said:
"… it is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results – certain penalties or legal forfeiture – afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties."
In Birmingham and District Land Co v London and North Western Railway Co (1888) 40 Ch D 268 at 286 Bowen LJ developed the theme, after referring to and rejecting the suggestion that the principle only applied to cases of forfeiture, in the following passage:
"The truth is that the proposition is wider than cases of forfeiture. It seems to me to amount to this, that if persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that such rights will either not be enforced or will be kept in suspense or abeyance for some particular time, those persons will not be allowed by a Court of Equity to enforce the rights until such time has elapsed, without at all events placing the parties in the same position as they were before. That is the principle to be applied. I will not say it is not a principle that was recognised by Courts of Law as well as of Equity. It is not necessary to consider how far it was always a principle of common law."
The plaintiff's counsel resisted the application of this principle to the present case on two grounds. He submitted, first, that it is confined to cases in which there are pre-existing contractual relations between the parties, as indicated by Bowen LJ in the passage which I have quoted. There does not appear to me to be any ground for restricting the application of the principle in this way. In my view equity will operate upon the conscience of the promisor who has entered into legal relations of other kinds just as it will in the case of a party to a contract.
Support may be found for this wider application of the principle in the dicta of judges in a variety of modern decisions. Three instances bear the high authority of Lord Goff, both in the House of Lords and when he was a judge of the Commercial Court. The first of these statements was made in 1979 in BP Exploration Co (Libya) Ltd v Hunt (No 2) [1982] 1 All ER 925 at 946, where Robert Goff J said, after quoting the passage from Hughes v Metropolitan Railway Co set out above:
"The principle, therefore, presupposes three things: (1) a legal relationship between the parties (2) a representation, express or implied, by one party that he will not enforce his strict rights against the other; and (3) reliance by the representee (whether by action or by omission to act) on the representation which makes it inequitable, in all the circumstances, for the representor to enforce his strict rights, or at least to do so until the representee is restored to his former position."
In Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1981] 1 All ER 923 Robert Goff J defined promissory estoppel in several places in his judgment in terms which encompassed legal relations of any kind and not merely contractual rights. At pages 934j-935a he said that the principle presupposed –
"the existence of a legal relationship between the parties, one of whom represents to the other that he will not enforce his strict legal rights against the other under that relationship …"
At page 937j Robert Goff J referred to a group of cases concerned with promissory estoppel, in which one party represents to another that he will not enforce "his strict legal rights under a legal relationship between the parties." Finally, he said at page 938c:
"Where, as in cases of promissory estoppel, the estoppel is founded on a representation by a party that he will not enforce his legal rights, it is of course a prerequisite of the estoppel that there should be an existing legal relationship between the parties. But where, for example, the estoppel relates to the legal effect of a transaction between the parties, it does not necessarily follow that the underlying transaction should constitute a binding legal relationship. In such a case the representation may well, as I have already indicated, give rise to an estoppel although the effect is to enlarge the obligation of the representor; and I can see no reason in principle why this should not be so, even if the underlying transaction would, but for the estoppel, be devoid of legal effect."
In Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd's Rep 391 at 399 Lord Goff, sitting in the House of Lords, used similar terminology when he said:
"Equitable estoppel occurs when a person, having legal rights against another, unequivocally represents (by words or conduct) that he does not intend to enforce those legal rights."
The formulation adopted by Lord Goff has been followed by a number of other judges, for example, by Mocatta J in Nippon Yusen Kaisha v Pacifica Navegacion SA (The Ion) [1980] 2 Lloyd's Rep 245 at 250 and Webster J in Pacol Ltd v Trade Lines Ltd (The Henrik Sif) [1982] 1 Lloyd's Rep 456 at 466.
These statements accordingly give support to the terms in which Peter Gibson LJ described the principle in Emery v UCB Corporate Services Ltd [2001] EWCA Civ 675, where he said at paragraph 27 of his judgment:
"A promissory estoppel, in my judgment, arises where
(1) there is a clear and unequivocal promise that strict legal rights will not be insisted upon;
(2) the promisee has acted in reliance on the promise; and
(3) it would be inequitable for the promisor to go back on his promise."
I would accordingly hold that the first objection advanced on behalf of the plaintiff is not well founded.
The second objection seems to me, however, to have more substance. It was to the effect that the appellant had not altered his position to his detriment, or, to put it in more generalised equitable terms, it is not inequitable for the plaintiff to be permitted to act inconsistently with his promise. The existence of detriment is a material factor in determining the question of such inequity, as Peter Gibson LJ stated at paragraph 28 of Emery v UCB Corporate Services Ltd:
"Some commentators express the second condition in terms of the promisee altering his position to his detriment (see, for example, Snell's Equity 13th Edition (2000) paragraph 39-08), but that is controversial (see, for example, Chitty: Law of Contracts, 28th Edition (1999), paragraph 3-089). However, the fact that the promisee has not altered his position to his detriment is plainly most material in determining whether it would be inequitable for the promisee to be permitted to act inconsistently with his promise."
The "gist of the equity", as Viscount Simonds said in Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 2 All ER 657 at 660, lies in the fact that one party has by his conduct led the other to alter his position. In Ajayi v Briscoe (Nigeria) Ltd [1964] 3 All ER 556 at 559 Lord Hodson expressed the qualifications to the equity in the following terms:
"This equity is, however, subject to the qualification (a) that the other party has altered his position, (b) that the promisor can resile from his promise on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position, (c) the promise only becomes final and irrevocable if the promisee cannot resume his position."
As I have stated above, I do not consider that the appellant was prejudiced in reality by his co-operation with the plaintiff's solicitors in answering questions and making a statement to them. In my opinion it would not be inequitable to allow the action to proceed against him, subject to the terms, similar to those imposed by McLaughlin J, that the plaintiff is not to be entitled to make any use of the statement made by the appellant or the attendance notes made by his solicitors on the appellant's visit to their offices. Provided the plaintiff undertakes through his counsel to deliver up to the appellant's solicitors within seven days the original and all copies in his possession or power of the appellant's statement and such attendance notes and not to make any use of their contents at the trial of the action, I think that the action should be allowed to continue against the appellant.
I would therefore dismiss the appeal on these terms.
IN HER MAJESTY'S COURT OF APPEAL IN NORTHERN IRELAND
BETWEEN