Aer Rianta International Cpt v Walsh Western International Ltd

• Jurisdiction: Ireland
• Judge: O'Flaherty J.,Mr Justice Francis D Murphy
• Judgment Date: 01 January 1997
• Neutral Citation: 1997 WJSC-SC 20
• Court: Supreme Court
• Docket Number: 311-96
• Date: 01 January 1997

1997 WJSC-SC 20

THE SUPREME COURT

O'Flaherty J

Barrington J

Murphy J

311-96

AER RIANTA INTERNATIONAL CPT v. WALSH WESTERN INTERNATIONAL LTD

Between:

AER RIANTA INTERNATIONAL CPT

Plaintiff/Respondent

and

WALSH WESTERN INTERNATIONAL LIMITED

Defendant/Appellants

Citations:

INTERNATIONAL CARRIAGE OF GOODS BY ROAD ACT 1990

CONVENTION ON THE CONTRACT FOR THE INTERNATIONAL CARRIAGE OF GOODS BY ROAD (CMR) ART 32

MCFADDEN V DUNDALK & DOWDALLSHILL COURSING CLUB LTD UNREP SUPREME 22.4.94

PALAMOS PROPERTY LTD & O'NEILL V BROOKS UNREP FLOOD 11.1.95 1996/7/ 2160

RSC O.28 r1

COOPER V SMITH 1883 26 CH D 700

KETTEMAN V HANSEL PROPERTIES LTD 1987 AC 189

Synopsis:

PRACTICE AND PROCEDURE

Appeal from refusal to grant liberty to amend defence - defendants applied as quickly as possible for amendment after discovery of error - Held: Justice required that amendment be allowed - (Supreme Court: O'Flaherty J.*, Barrington J., Murphy J. *dissenting - 28/11/1996) - [1997] 2 ILRM 45

|Aer Rianta International CPT v. Walsh Western International Ltd.|

PRACTICE AND PROCEDURE

Appeal from refusal to grant liberty to amend defence - defendants applied as quickly as possible for amendment after discovery of error - Held: Justice required that amendment be allowed - (Supreme Court: O'Flaherty J.*, Barrington J., Murphy J. *dissenting - 28/11/1996) - [1997] 2 ILRM 45

|Aer Rianta International CPT v. Walsh Western International Ltd.|

1 Mr Justice Francis D Murphydelivered the 28th day of November 1996. [BARRINGTON CONC]

2 This is an appeal from the decision of Johnson J given on the 18th of November 1996 refusing the application on behalf of the Defendant/ Appellants for liberty to amend their defence herein.

3 In these proceedings, which were instituted on the 2nd day of December 1994, the Plaintiffs claim damages for breach of a contract under which it is alleged that the above named Defendants, Walsh Western International Limited,(hereinafter referred to as "the Irish Company") agreed to transport certain goods to Moscow for the Plaintiff. It is contended that the contract incorporated the provisions of the Convention on the Contract for the International Carriage of Goods by Road (CMR) which was enacted into domestic law by the International Carriage of Goods by Road Act 1990. It is further contended that the goods were entrusted to the Irish Company on the 25th of February 1994. It is common case that the goods were stolen from a warehouse or compound in Holland during the weekend of the 26th/27th of February 1994.

4 In its defence delivered on the 14th day of July 1995 by the then solicitors on behalf of the Defendants the Irish Company pleaded asfollows:-

"1 It is admitted that by a series of consignment notes bearing serial numbers NL235598, NL235599, NL235597, NL2355600 and NL235602, the Defendant, as carrier agreed to transport a consignment of cigarettes, electrical goods and perfume on behalf of the Plaintiff toMoscow."

5 The Defence went on to deny that the contract between the parties was subject to or governed by the CMR or that the Irish Company had received the consignment of goods or that they were in their possession at the weekend ofthe 26th/27th February 1994.

6 In July 1996 a notice of change of solicitor was filed and Messrs Whitney Moore and Keller came on record as solicitors on behalf of the Irish Company. Also in July 1996 , Counsel instructed by Messrs Whitney Moore and Keller informed the Court that an application would be brought for liberty to amend the Defence. A Notice of Motion for that purpose was is sued on the 1lth day of September 1996 and the application was heard and determined by Johnson J on the 18th of November 1996.

7 The substantive amendment sought by the Irish Company is radical in its effect. Liberty is sought to replace the admission of the contractual relationship between the Plaintiff and the Irish Company with an express denial thereof and the proposed amendment to paragraph 1 of the Defence then goes on to provide as follows:-

"Without prejudice to the foregoing, the Defendant says that any arrangement made by the Plaintiff in relation to the said consignment was made with Walsh Western B.V. and not with theDefendant."

8 In opposing the application for this radical amendment the Plaintiffs made the arguments following,:-

9 1 The Plaintiffs are, or may be barred, by Article 32 of the CMR from instituting proceedings against the Dutch company at thisstage.

10 2 The admission that the Irish Company had entered into the relevant contract with the Plaintiffs was expressed in clear and unambiguous terms in the Defence delivered on the 14th of July 1995 and for a period of at least 12 months no indication was given by the Defendants that this did not represent the case which they proposed tomake.

11 3 There is a substantial body of evidence emanating from the Irish Company itself that it was that company and not Walsh Western B.V. ("the Dutch company") which was the contractingparty.

12 4 No witness gave evidence on behalf of the Irish Company to explain why the Defence as delivered failed, and failed so comprehensively, to plead the defence which the Irish Company now seeks to raise.

13 5 In the event of the amendment being allowed that it would be impossible or at any rate impracticable for the parties to be ready for the hearing of the case on the date allocated therefor, namely, the 17th of December 1996.

14 Whilst the argument originally made with regard to the prejudice to the Plaintiff as a result of their claim against the Dutch company being barred may seem crucial that is not the case. The time limit for bringing proceedings against the Dutch company would appear to have expired before the Irish Company delivered its defence so that the admission contained therein could not have prejudiced the Plaintiff in relation to the institution of proceedings against any other party. Indeed it is clear that this was not a factor on which the Plaintiff ultimately relied and it is not referred to in the note of the judgment delivered by the learned Judge of the High Court.

15 From the note agreed by Counsel of the ex tempore judgment of Johnson J it appears that the trial judge reached the following conclusions:-

16 1 In the present case there was absolutely no explanation from the Defendants former solicitors as to why the admission that the Defendant was the carrier had been made.

17 2 That it was uncontroverted that the consignment notes as is sued to the Plaintiffs by the Irish Company identified the Irish Company and not the Dutch Company as being the carrier and

18 3 That the opinion from the Irish Company's Dutch lawyers stated that the Irish Company and not the Dutch company was thecarrier.

19 In my view the second and third of these conclusions are not of decisive importance on an application for liberty to amend the defence. These are matters which would be considered more properly on the trial of the action if and when liberty to amend is granted. The crucial issue is that raised by the first conclusion which reflects the views expressed by this Court in McFadden v. Dundalk and Dowdallshill Coursing Club Limited & Others (delivered 22ndApril 1994). However before considering the narrow but important point authoritively decided in the McFadden case it may be helpful to consider the general principles applicable on an application for leave to amend pleadings which are very fully set out in the judgment of Flood J in Palaomos Property Limited & O'Neill v Brookes &Others (unreported 11th of January 1995). Any analysis of the relevant law must commence with Order 28 rule 1 of the Rules of the Superior Court which provides as follows:-

"1 The Court may, at any stage of the proceedings, allow either party to alter or amend his endorsement or pleadings in such manner and on such terms as may be just, and all such amendments should be made as may be necessary for the purpose of determining the real questions in controversy between the parties."

20 Whilst the word "may" indicates the discretion available to the Court the understandable requirement of the rule is to ensure the determination of "the real questions in controversy between the parties".

21 How the Court exercises its discretion was summarized in the case (referred to in the judgment of Flood J) of Cooper andSmith [1883] 26 CH. D. 700 at page 710 as follows:-

"It is a well established principle that the object of the Court is to decide the rights of the parties, not to punish them for mistakes they made in the conduct of their cases by deciding otherwise than in accordance with their rights................. I know of no kind of error or mistake which if not fraudulent or intended to overreach, the Court ought not to correct if it can be done without injustice to the other party. Courts do not exist for the sake of discipline but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of grace or favour ................ It seems to me that as soon as it appears that the way in which the party has framed its case will not lead to a decision on the real matters in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter ofright."

22 In Ketteman v. Hansel Properties Limited [1987] A.C.189. Lord Keith of Kinkel explained the nature of an injury to one party resulting from an amendment to pleadings that would render liberty in that behalf an injustice to the other party. He explained the position (at page 203 of the report) as follows:-

"The sort of injury which is here in contemplation is something which places the other party in a worse position from the point of view ofpresentation of his case than he would have been in if his opponent had pleaded the subject-matter of the...