Cavanaghs of Charleville Ltd v Fitzpatrick
| Jurisdiction | Ireland |
| Judge | Mr. Justice Quinn |
| Judgment Date | 14 March 2019 |
| Neutral Citation | [2019] IEHC 161 |
| Court | High Court |
| Docket Number | 2018/848JR |
| Date | 14 March 2019 |
[2019] IEHC 161
THE HIGH COURT
JUDICIAL REVIEW
Quinn J.
2018/848JR
AND
Order of certiorari – Arbitration – Breach of contract – Applicants seeking an order of certiorari quashing an order of the Circuit Court – Whether the Circuit Court failed to apply the correct legal test to the facts before it
Facts: The applicants, Cavanaghs of Charleville Ltd and Henry Ford & Son Ltd, applied to the High Court for an order of certiorari quashing an order of the Circuit Court made on 26th July 2018 which refused an application by the applicants to stay the proceedings of the respondent, Mr Fitzpatrick, against them in the Circuit Court and refused to refer same to arbitration pursuant to Article 8.1 of the Uncitral Model Law on International Commercial Arbitration as it applies in the State pursuant to s. 6 of the Arbitration Act 2010. The applicants also sought an order of mandamus requiring the Circuit Court to refer the proceedings to arbitration pursuant to Article 8. In the Circuit Court proceedings the respondent claimed, inter alia, rescission of a contract entered into with the first applicant for the purchase of a new Ford Transit Connector motor vehicle on 1/9/2015. The respondent claimed that the vehicle was defective and also claimed against both applicants damages for breach of contract and negligence and against the second applicant damages for negligence. The applicants submitted that: (1) the Circuit Court Order was based on an error of law and the court failed to apply the correct legal test to the facts before it, in that it did not base its decision on a consideration of whether the arbitration agreement entered into by the parties was null and void, inoperative or incapable of being performed as it was required to do by Article 8(1) of the Model Law; (2) in failing to apply the mandatory provisions of Article 8(1) the Circuit Court failed to perform a duty that it was obliged by statute to fulfil; (3) the decision of the Circuit Court was irrational and based on irrelevant consideration because in refusing the application the Circuit Court noted and appeared to base its decision upon a claim that the respondent had been without a car for some time and had a disabled relative to accommodate; (4) the Circuit Court’s failure to apply or incorrectly interpret the relevant statutory test for the referral of disputes to arbitration was an error of law so fundamental to the Circuit Court’s consideration of the application before it that it deprived the Circuit Court of jurisdiction to make the order.
Held by Quinn J that there was only one test which under Article 8.1 the Court was obliged to apply and it was clear from the DAR that no finding was made by the judge by reference to that test. Quinn J accepted the applicants’ submission that to read such a finding into the record of the decision was a step too far; in particular no finding was made apportioning as between the parties blame for the delay, let alone that such delay had the effect of triggering the application of the Article 8.1 test. Therefore, Quinn J held that the Court failed to consider and apply the correct test. Quinn J held that the Circuit Court judge, by not addressing himself to the test in Article 8.1 and taking into account the extraneous consideration that the respondent was without a car for a period of 3 years, he clearly failed to remain within jurisdiction, in the sense considered in The State (Holland) v Kennedy [1977] IR 193. Quinn J held that an order of mandamus requiring the Circuit Court to refer the matter to arbitration pursuant to Article 8.1 was not an appropriate order for the court to make, as to do so would be to substitute its own finding on the merits of the application, applying the statutory test to the facts of the case.
Quinn J held that he would make an order of certiorari quashing the order of the Circuit Court made on the 26th of July, 2018 and remit the matter to the Circuit Court for determination of the application to refer the proceedings to arbitration. Subject to that application being heard and pending its determination, Quinn J held that he would extend the stay on the Circuit Court proceedings ordered by Noonan J on the 22nd of October, 2018.
Application granted.
This is an application for an order of certiorari quashing an order of the Circuit Court made on 26th July 2018 which refused an application by the Applicants to stay the Respondent's proceedings against them in the Circuit Court and refused to refer same to arbitration pursuant to Article 8.1. of the Uncitral Model Law on International Commercial Arbitration as it applies in the State pursuant to s.6 of the Arbitration Act 2010.
The Applicants seek also an order of mandamus requiring the Circuit Court to refer the proceedings to arbitration pursuant to Article 8.
In the Circuit Court proceedings the Respondent claims, inter alia, rescission of a contract entered into with the First Applicant for the purchase of a new Ford Transit Connector motor vehicle on 1/9/2015. The Respondent claims that the vehicle is defective and also claims against both Applicants damages for breach of contract and negligence and against the Second Applicant damages for negligence.
The contract between the Respondent and the First Respondent is in the standard form issued by the Society of the Irish Motor Industry (‘SIMI’). It contains an arbitration provision in clause 13 in the following terms:-
‘Disputes as between the parties to this Agreement shall be referred to Arbitration under the rules of the Chartered Institute of Arbitrators of Ireland and in accordance with the provisions of the Arbitration Act 2010 in the event that:
(a) The customer does not refer the dispute to the SIMI pursuant to clause 12; or
(b) the customer does not accept the recommendation of the SIMI Retail Motor Industry Standards Tribunal; or
(c) the dispute relates to a new vehicle under manufacturer's warranty.
In the event that the dispute involves a claim for an amount not exceeding €5,000 then, in accordance with the provisions of the Arbitration Act 2010, the customer shall not be bound (unless he or she otherwise agrees that any time after the dispute has arisen) into arbitration’.
The respondent claims that on various dates, stated to include 4/10/2016, 31/03/2017 and/or 5/04/2017 he travelled to the First Applicant's premises in Charleville, County Cork to have parts replaced, with no success in relation to the driver's door, which continued to allow leakage of water in wet weather. He states that the vehicle was purchased so that it met the requirements for transporting a relative who has a medical condition and that it is unfit for that purpose. He claims that, pending the resolution of the proceedings, he is without a suitable motor vehicle, particularly having regard to his family requirements.
On a date unknown in August 2017, the Respondents then solicitors, Carmody & Company, delivered a letter to the Applicants described as ‘a Letter Commencing Arbitration’ and entitled ‘In the matter of the Arbitration Act 2010 in the matter of an Arbitration between James Fitzpatrick Claimant and Cavanaghs of Charleville Limited and Henry Ford and Son Limited Respondents’.
The letter recited the defects complained of and that the driver's door had not been rectified notwithstanding their client making multiple trips to Charleville. It continued: ‘According to the terms and conditions of the contract and in particular Clause 13 thereof, we write to put you on notice that we are now referring the matter to arbitration pursuant to the provisions of the Arbitration Act, 2010’. The letter requested that the Applicants concur in the appointment of an arbitrator and nominated three proposed arbitrators.
On 29th August, 2017 the respondent issued proceedings in the Circuit Court against the applicants. They were not served until February 2018.
On 30th August, 2017 Messrs James Riordan and Partners Solicitors replied to Messrs Carmody indicating that their clients Henry Ford and Son Limited were taking over the defence of this matter on behalf of themselves and the dealer. They said that their clients were currently investigating the matter and wish to have the vehicle inspected and requested inspection facilities.
Messrs Riordan also indicated that they would revert ‘under separate cover in relation to your proposed arbitrators’.
On 21st February, 2018 Messrs Caroline Fanning Solicitors, wrote to JRAP O'Meara Solicitors (formerly James Riordan & Partners) notifying them that they had been instructed to take this matter over and enclosing a Notice of Change of Solicitor. They stated that their instructions were ‘to proceed to litigate the matter now through the courts’.
Under cover of letters dated 27th February, 2018 Messrs Fanning served the Civil Bill on the Applicants.
On 5th April, 2018 Messrs JRAP O'Meara wrote to Messrs Fanning enclosing an Entry of Appearance and confirming again that their client Henry Ford and Son Limited are taking over the defence of this case on behalf of themselves and the dealer.
Messrs JRAP O'Meara referred to the letter of August, 2017 invoking the arbitration clause, and accepted...
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