Charles Gallagher Ltd v Irish Asphalt Ltd

CourtHigh Court
JudgeMr. Justice Birmingham
Judgment Date27 April 2012
Neutral Citation[2012] IEHC 614
Date27 April 2012

[2012] IEHC 614


[No. 1138 P/2010]
Charles Gallagher Ltd v Irish Asphalt Ltd









Stay on proceedings

Jurisdiction of court to manage cases - Principles to be applied - Factors to be taken into account - Application by defendant to stay proceedings pending conclusion of other proceedings against same defendant - Whether fair to plaintiff to stay proceedings - Whether waste of court resources for proceedings to come on for trial pending conclusion of other case - Kalix Fund Ltd v HSBC Institutional Trust Services (Ire) Ltd [2009] IEHC 457, [2010] 2 IR 581; Cork Plastics v Ineos UK Ltd [2008] IEHC 93, (Unrep, Clarke J, 7/3/2008); Re Norton Health Care Ltd [2005] IEHC 411, [2006] IR 321 and Kelly v. Lennon [2009] IEHC 320, [2009] 3 IR 794 approved - James Elliot Construction Ltd v Irish Asphalt Ltd [2014] IEHC 208, (Unrep, Ryan J, 11/4/2014) and Hansfield Developments v Irish Asphalt Ltd [2010] IEHC 330 (Unrep Gilligan 10/3/2010) considered - Limited relief granted (2010/1138P - Birmingham J - 27/4/2012) [2012] IEHC 614

Charles Gallagher Limited v Irish Asphalt Limited

Facts: The defendant, Irish Asphalt Limited (‘Irish Asphalt’) brought a motion to stay the proceedings brought by the plaintiff, Charles Gallagher Ltd. (‘Gallagher’) until a Supreme Court appeal concerning a similar matter had been decided. The defendant in these proceedings, Irish Asphalt, was also the defendant/appellant in the Supreme Court appeal. In 2000, the plaintiff purchased land for the purpose of building housing estates on two sites. Eight years later cracks started to appear in the houses that had been built and an investigation determined that the cracking was attributable to the phenomenon known as “pyrite heave.” This was because the infill supplied by the defendant during the groundwork stage of the build contained excessive levels of pyrite that made it susceptible to swelling. Quite a few cases had emerged in relation to pyrite litigation and the trend illustrated that proceedings of this nature tended to be very lengthy and costly. This was one of the reasons the defendant sought to stay the case until after the conclusion of the Supreme Court appeal. The defendant argued that the Supreme Court appeal judgment would benefit the parties in this case as it would deal with a number of issues common to both and save court time and resources. The plaintiff disagreed on this point and did not want any delay in getting its case on. The plaintiff and defendant agreed that the Court has an inherent jurisdiction to stay any proceedings but the plaintiff argued that it is a jurisdiction to be exercised sparingly.

Held by Birmingham J:

The court agreed that the litigation would be lengthy and costly for all parties. It also agreed that the Supreme Court appeal decision would be relevant to this case. However, it did acknowledge that if the case was stayed in its present state and only reactivated after the Supreme Court appeal had been determined then significant delay would be caused not only to the plaintiff but also the homeowners. After consideration of all of these factors, the Court directed that the case should not come on for hearing until the Supreme Court decision was available. The court directed that the parties continue in their preparations for trial so that no further delay would arise when the Supreme Court proceedings had finished. Therefore, the case was to be put into a state of readiness and the courts restriction was limited to the case being brought on for trial only.


JUDGMENT of Mr. Justice Birmingham delivered the 27th day of April, 2012


1. The matter now before the Court represents the latest chapter in the pyrite litigation saga. At issue is a motion brought by the defendant, Irish Asphalt Limited ("Irish Asphalt"), to stay the proceedings brought by the plaintiff, Charles Gallagher Ltd, ("Gallagher") until a Supreme Court appeal in a case entitled James Elliot Construction Limited ("Elliot") plaintiff/respondent v. Irish Asphalt Limited, defendant/appellant has concluded. Also listed before the Court was a motion brought by the plaintiff seeking to have the present proceedings brought by Charles Gallagher Ltd. against Irish Asphalt Ltd. consolidated with proceedings brought by the plaintiff against a company known as Joe Miley & Partners (Dublin) Ltd. ("Miley"). However, in a situation where the two motions would not have been disposed of within the day, and when there was some uncertainty or vagueness about the intentions of Miley. the consolidation motion was not proceeded with at this stage.


2. in 2000, the plaintiff purchased a site in Donabate, County Dublin, on which it built a housing estate known as "Somerton" comprising 121 houses. In 2003, the plaintiff purchased a second and adjoining site on which it built an estate known as "Carr's Mill" comprising 153 houses. Each estate was built on a phased basis over a number of years. According to the plaintiff, most of the groundwork for the two estates was carried out by Miley under contract to Gallagher. Again, according to the plaintiff, Miley sourced the infill required for the groundwork from Irish Asphalt.


3. In October 2008, cracking appeared in one house, 106, Somerton. Investigation into the cause began. The plaintiff's case is that the cause of the cracking was a phenomenon known as "pyrite heave". Following the emergence of apparent problems at 106, Somerton, a process of examining other houses in the developments was commenced and this is said to have revealed difficulties with some, but by no means all, houses. There seems to be some uncertainty about the exact number of houses alleged to have been affected, as of the time of the delivery of the statement of claim in the proceedings against Miley, it seems that 84 houses had been tested, and of those, the results from forty were found to indicate the presence of infill with excessive pyrite levels. However, in the course of argument for the present motion, counsel for the plaintiff indicated that, in fact, 67 houses were affected.


4. An overview of the pyrite heave phenomenon was offered by Charleton J., the trial judge in the Elliot case, who quoted from a document prepared by the Comité Technique Québécois D'étude Des Problèmes De Gonflement Associés A La Pyrite (CTQ-M200). He did so as follows:-

"Pyrite (FeS 2) is the main iron sulphide responsible for swelling and is also one of the most abundant minerals on the planet. Pyrite is found in several different types of rock, in fairly low percentages (<1%)."


Pyrite exists in different forms, namely massive (chemically stable) and "framboidal" (chemically unstable). The framboidal form is characterised by an agglomeration of very small cubic crystals (not visible to the naked eye) with a very large specific surface. In some conditions, this form of pyrite can oxidise in the presence of water and react with other minerals present in the same rock to form gypsum. Gypsum, when it forms, occupies a much greater volume than pyrite, causing swelling of the granular backfill. The swelling produces cracking and causes concrete floor slabs to heave. In some cases, especially in garages, the foundation walls may also crack and be displaced outwards.


The chemical solutions formed during pyrite oxidation can be absorbed by the concrete, causing the concrete floor slab to sulfatize and heave. The swelling, thus, has two constituent elements, namely swelling of the aggregate and intrinsic swelling of the concrete slab.


This chemical reaction is generally slow, and it takes between 10 and 15 years after the building is constructed before it is visible to the occupants. Slab displacement levels vary, but can be as high as 5mm per year.


The chemical reaction can remain active over long periods (more than 40 years, for example). The speed and extent of the reaction will depend on several factors, including the depth of the backfill, the percentage and type of pyrite present, the water content and porosity of the materials, and so on. Problematic aggregate is generally composed of significant percentages of argillaceous limestone and argillaceous shale. These rocks are composed mainly of clay minerals and carbonates (CaCO 3) in varying proportions. They also contain variable percentages of pyrite, but generally not more than 1%. Because these types of rock contain significant percentages of clay minerals, they are more permeable to air and water and less resistant to gypsum crystallization.


The percentages of these types of rock in aggregate can vary considerably. For example, materials with very high swelling potential may be mixed with others that have negligible swelling potential, and there are. of course, many intermediate materials between these two extremes. The geographical sectors most affected by swelling are located close to geological formations rich in that particular type of rock, which is mined locally and may be used as granular backfill under concrete floor slabs.


Most aggregates used as underfloor backfill contain pyrite and other sulphurs, but a very large percentage of buildings will never exhibit symptoms of pyrite- related problems. This is because pyrite found in hard rock with low clay mineral contents does not oxidize and the materials remain stable".


5. On the 8 th February 2010, the plaintiff issued two plenary summonses, one naming...

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