Bord na Mona v John Sisk and Son Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Blayney,Mr. Justice Costello
• Judgment Date: 31 May 1990
• Date: 31 May 1990
• Docket Number: 1989/126 Sp.,No. 126 Sp Court 6/1989,[1989 No. 126 Sp.]
• Court: High Court

1990 WJSC-HC 104

THE HIGH COURT

No. 126 Sp Court 6/1989

BORD NA MONA v. SISK

IN THE MATTER OF THE ARBITRATION ACTS 1955 AND 1980

AND IN THE MATTER OF SECTION 38 OF THE ARBITRATION ACT 1954

BETWEEN

BORD NA MONA

PLAINTIFFS

AND

JOHN SISK AND SON LIMITED, SAMUEL STEPHENSON AND MERCURY ENGINEERING COMPANY LIMITED

DEFENDANTS

Citations:

RSC 0.56 r4

CITLAND LTD V KANCHAN OIL INDUSTRIES PVT LTD 1980 2 LLOYDS 274

DUBLIN & CO BROADCASTING LTD V INDEPENDENT RADIO & TV COMMISSION,RADIO2000 & CAPITAL RADIO PRODUCTIONS UNREP HIGH MURPHY 12.5.89

HEGARTY, STATE V WINTERS 1956 IR 320

O'DONOGHUE V VETERINARY COUNCIL 1975 IR 398

CORRIGAN V IRISH LAND COMMISSION 1977 IR 317

HAIGH AND LONDON & NORTH WESTERN & GREAT WESTERN RAILWAY COMPANIES, INRE 1896 1 QB 649

R V RAND 1866 1 QB 230

TAVERNER, R V JUSTICES OF COUNTY TYRONE 1909 2 IR 763

Synopsis:

ARBITRATION

Award

Annulment - Application - Time limit - Extension - Principles applicable - Arbitrator's conduct - Conflict of interest - Allegations of misconduct and bias - Extension refused - (1989/126 Sp - Blayney J. - 31/5/90)

|Bord na Mona v. John Sisk & Son Ltd.|

PRACTICE

Time limit

Extension - Arbitration - Award - Annulment - Grounds of application discovered after expiration of time limit - Principles applicable - Arbitrator's conduct - Conflict of interest - Allegations of misconduct and bias - Extension refused - (1989/126 Sp - Blayney J. - 31/5/90)

|Bord na Mona v. John Sisk & Son Ltd.|

TRIBUNAL

Member

Misconduct - Bias - Conflict of interests - Arbitrator - Award - Motion to set aside - Late application - Extension of time sought - Principles applicable - No reasonable grounds for belief that award affected by bias - Extension refused - Rules of the Superior Court, 1986, order 56 - (1989/126 Sp - Blayney J. - 31/5/90)

|Bord na Mona v. John Sisk & Son Ltd.|

1 Judgment of Mr. Justice Blayney delivered the 31st day of May 1990.

2 This is a Motion under Order 56 Rule 4 of the Rules of the Superior Courts seeking an extension of time for an application to set aside an award made in an arbitration between the Plaintiffs and the Defendants.

3 The arbitration was held pursuant to a clause contained in a building contract dated the 14th January 1977 and made between the Plaintiffs of the one part and the first named Defendant (to whom I shall refer as "Sisks") of the other part. The arbitrator, John E. O'Reilly, architect, had been appointed by the President of the Royal Institute of Architects in Ireland. Initially, the arbitration was to be held between the Plaintiffs and Sisks only, but by agreement between all the parties the second named Defendant (to whom I shall refer as Mr. Stephenson) and the third named Defendants (to whom I shall refer as Mercury) were added as parties also.

4 The subject matter of the building contract was an office building and ancillary works at 79 Lower Baggot Street. Mr. Stephenson was the architect and Mercury was the sub-contractor for the air conditioning and mechanical services.

5 Three separate issues arose in the arbitraton: the first related to the air conditioning and mechanical services; the second to the "curtain walling", and the third to a counterclaim submitted by Sisks.

6 Practical completion of the work to be carried out under the contract took place on the 17th November 1978; Mr. O'Reilly was appointed arbitrator on the 30th December 1985, and the arbitration was held on the 30th November 1987 and subsequent days. At the request of the parties Mr. O'Reilly made separate interim awards in respect of each of the issues. They were as follows:

7 1. By interim award dated the 8th January 1988, he dismissed the Plaintiffs" claim in relation to the "air conditioning and mechanical services".

8 2. By interim award dated the 21st January 1988, he held that the Plaintiffs had sustained loss damage and expense, which he measured at £752,500, because of defects in the curtain walling system; that Mr. Stephenson was liable for the entire of the said loss damage and expense, and that Sisks were not liable for any part of the said loss damage and expense.

9 3. By interim award dated the 7th March 1988, he awarded by consent of the Plaintiffs and Sisks that the Plaintiffs should pay Sisks the sums of £94,563.14 and £5,160; and he further determined that Sisks were not entitled to be paid interest on the said sum of £5,160.

10 In a final award made in two parts on the 8th June 1988 Mr. O'Reilly dealt with the costs of all the parties consequential upon his interim awards.

11 The Plaintiffs instituted proceedings in Engalnd with a view to having executed there the award obtained against Mr. Stephenson and in those proceedings they ascertained on the 15th December 1989 that Mr. O'Reilly, in the course of his professional practice as an architect, had carried out work for Sisk Properties Limited, an associate company of Sisks. They claimed that this entitled them to have the awards made in the arbitration set aside on the ground that Mr. O'Reilly had misconducted himself in not disclosing to the Plaintiffs his connection with Sisk Properties Limited. On the 23rd February 1989 the Plaintiffs issued a special summons seeking an Order setting aside all the awards on this ground, and on the 4th September 1989 served the Notice of Motion which is the subject matter of this judgment seeking an extension of time for bringing these proceedings.

12 Order 56 Rule 4 of the Rules of the Superior Courts provides that an application to "set aside an award shall be made within six weeks after the award has been made and published to the parties, or within such further time as may be allowed by the Court." The Plaintiffs" application is accordingly well out of time, and the difficult issue that I have to determine is whether further time should be allowed so that the application may be brought. It is difficult because the criterion to be applied is very general. In Citland Limited .v. Kanchan Oil Industries PVT Limited 1980 2 Lloyds Reports Part III, Mustill J., the co-author of Mustill and Boyd on "Commerical Arbitration" said in his judgment with reference to the extension of time for setting aside awards:

"The reported cases show that the period can in appropriate circumstances be enlarged. It is often convenient, for the purposes of discussion, to extract from these decisions a list of factors which are relevant to the question whether an extension should be granted. Such a list does not lay down a rigid test. The only criterion is whether the interests of justice require that the time should be enlarged, and the weight to be given to each factor will depend on the circumstances of the case."

13 The list of factors to which he refers are detailed in the second edition of his text book at page 568:

14 2 "1. The desirability of adhering to time limits prescribed by rules of court.

15 2. The likelihood of prejudice to the party opposing the application if the time is extended.

16 3. The length of the delay by the applicant.

17 4. Whether the applicant had been guilty of unreasonable or culpable delay.

18 5. Whether the applicant has a good arguable case on the merits."

19 In the present case it seems to me that the weight to be given to each of these factors varies greatly, with the most weight being given to the last factor, whether the applicant has a good arguable case on the merits. I will start with brief comments on the other four.

20 In Citland v. Kanchan Oil, Mustill J., said in his Judgment in regard to the six weeks" time limit prescribed by the corresponding English rule:

"The period is a limit which must be strictly observed. There is good reason for this. The utility of arbitration demands that a final award, once made, should be speedily honoured. If the validity of the award is challenged, the merits of the challenge should be promptly investigated, whilst memories are fresh, and promptly disposed of, so that if the award is found to be valid the successful party suffers no undue delay."

21 I would respectfully agree, but it seems to me that these remarks are directed to a case where the ground for setting aside the award was known, or ought to have been known, at the time the award was published, which is not the case here. I accept that the Plaintiffs did not become aware of Mr. O'Reilly's connection with Sisk Properties Limited until the 15th December 1988, six months after the final awards had been published, so the application could not have been brought within the period prescribed by the rules. For this reason I attach little weight to the first factor.

22 The next factor is the likelihood of prejudice to Sisks if the time is extended. Kevin Callan, a director of Sisks, said in his Affidavit that prejudice would be caused to Sisks in three respects:

23 1. They would be obliged to put the Plaintiffs" claim back into their accounts as a contingent liability.

24 2. The recollection of their witnesses would have diminished because of the time lapse.

25 3. Notes of evidence taken at the hearing of the arbitration had been destroyed in the belief that the case was at an end.

26 There would also be the inevitable prejudice of having to devote time and effort to defending a claim arising out of work which was completed over eleven years ago, even if they should again be successful in defeating it. So in my opinion there is a likelihood of prejudice to Sisks in these respects.

27 I will deal together with the length of the delay by the Plaintiffs and whether they were guilty of unreasonable or culpable delay. The length of the delay is clearly substantial. The first interim award was published on the 8th January 1988, and the two parts of the final award on the 6th June 1988, but the present proceedings were not initiated until the 23rd February 1989, more than a year after the first interim award, and eight months...