Des Hennessy Building Contractors Ltd v O'Beirne
| Jurisdiction | Ireland |
| Judge | Ms. Justice Costello |
| Judgment Date | 06 October 2015 |
| Neutral Citation | [2015] IEHC 596 |
| Court | High Court |
| Date | 06 October 2015 |
[2015] IEHC 596
THE HIGH COURT
BETWEEN
AND
AND
Bankruptcy – S. 8 of the Bankruptcy Act 1988 – Bankruptcy summons – Enforcement of arbitral award – The Arbitration Act 2010 – Time barred challenge to the appointment of arbitrator – UNCITRIL Model Law on International Commercial Arbitration
Facts: The respondents sought an order for dismissal of the bankruptcy summons served upon them by the petitioner for enforcement of an arbitral award made by the consent of parties pursuant to which the respondents paid the award of the agreed amount but not the costs as mentioned under the certificate of taxation. The respondent contended that the issuance of bankruptcy summons procedure for enforcement of the arbitral award was inappropriate and that the appointment of the arbitrator was not in accordance with the terms of the agreement entered between the parties.
Ms. Justice Costello refused to grant an order for the dismissal of the bankruptcy summons procedure. The Court held that the present proceedings were time barred and the respondents had an opportunity to file an appeal for setting aside the arbitral award, which they did not avail, and art. 36 of the UNCITRIL Model Law on International Commercial Arbitration would not apply to the present case as the arbitral proceedings took place within the State. The Court observed that the language of s. 23 of the Arbitration Act 2010 that an arbitration award may be enforced being permissive, it did not follow that an arbitration award could not be relied upon as a debt for the purposes of obtaining bankruptcy summons. The Court found that the petitioner was a creditor in respect of the amount set out in the certificate of taxation and the respondents were its debtors and the fact that the debt emanated on foot of an arbitration proceeding is immaterial.
JUDGMENT of Ms. Justice Costello delivered on 6th day of October, 2015.
1. Michael O'Beirne and Anne O'Beirne ("the respondents") were served with bankruptcy summonses dated 30 th April, 2015, by Des Hennessy Building Contractors Limited ("the petitioner") in respect of the sum of €75,567.22. The respondents seek to have the summonses dismissed pursuant to s. 8 of the Bankruptcy Act 1988, as amended.
2. Section 8 of the Bankruptcy Act 1988, as amended, provides:-
2 "(5)A debtor served with a bankruptcy summons may apply to the Court in the prescribed manner and within the prescribed time to dismiss the summons.
(6) The Court-
(a) may dismiss the summons with or without costs, and
(b) shall dismiss the summons if satisfied that an issue would arise for trial."
3. The test to be applied when hearing an application to dismiss a bankruptcy summons was recently considered in Marketspreads Limited v. O'Neill & Rice [2014] IEHC 14 by Dunne J. and by this Court in ACC Loan Management Limited v. C.M. [2015] IEHC 96. I do not propose to rehearse the law set out in those two judgments. The respondents and the petitioner agreed that the test to be applied is whether there is a real and substantial issue and one which is, at least, arguable and has some prospect of success.
4. The respondents and Des Hennessy Limited entered into a building agreement on 17 th July, 2009. The Building Agreement included an arbitration clause which provided that either party could request the President of the Royal Institute of the Architects of Ireland ("RIAI") to appoint an arbitrator after consultation with the President of the Construction Industry Federation ("CIF"). The parties could not agree to the appointment of an arbitrator and solicitors acting for Des Hennessy Limited requested the President of the RIAI to nominate an arbitrator. By letter dated 20 th March, 2013, she notified the parties that she nominated Mr. James O'Donoghue to act as Arbitrator. On the 10 th April, 2013, solicitors acting for the respondents wrote to Mr. John Graby, a director of the RIAI, pointing out that under the arbitration clause the President of the RIAI is supposed to consult with the President of the CIF prior to the nomination of an arbitrator. They asked that Mr. Graby would let them know whether or not this was done. On 17 th May, 2013, they raised the issue again with Mr. Graby. Mr. Graby replied on 20 th May, 2013, simple stating that the President had made her appointment on foot of the application and was now functus officio in the matter and that she and the RIAI would not engage in any further correspondence with either party on the matter.
5. The following month, on 12 th June, 2013, the respondents' solicitors wrote to Mr. Matt Gallagher, the President of the CIF asking him to clarify whether or not he was consulted by the President of the RIAI in relation to her nomination of Mr. O'Donoghue as arbitrator in respect of the Building Agreement of 17 th July, 2009, between Des Hennessey Limited and the respondents. They sent a reminder letter on 17 th June, 2013, and again on 19 th June, 2013. On 20 th June, 2013, Mr. Martin Lang replied on behalf of the President of the CIF stating that the inquiry should properly be referred to the appointing body, the RIAI. The respondents made no further queries until July, 2014.
6. Following an initial letter from the Arbitrator to the parties' solicitors dated 22 nd March, 2013, to arrange a tele conference, the respondents' solicitors wrote on 9 th April, 2013, headed "without prejudice to jurisdiction" raising, inter alia, the issue as to whether or not the Arbitrator had been properly nominated by the President of the RIAI. The Arbitrator dealt with this by way of a preliminary application. There were written submissions prepared by the parties and oral submissions and then further written submissions. The respondents were represented by senior counsel. The Arbitrator gave his ruling on 23 rd July, 2013. He held that no evidence was presented by the respondents of any lack of compliance with the provisions of the arbitration clause on the part of the President of the RIAI and that he was duly appointed. He formally ruled that he had jurisdiction to act as Arbitrator in the reference. In addition, he noted that the correct name of the claimant should be Des Henessy Building Contractors Limited and amended the name of the claimant in the arbitration. The respondents did not appeal this ruling.
7. The Arbitrator issued directions in relation to the hearing of the arbitration and the arbitration commenced on 20 th November, 2013. On 21 st November, 2013, counsel for the parties informed the Arbitrator that the parties had reached a settlement of the matters in dispute between them and requested that the Arbitrator publish a final award by consent setting out the terms of that settlement.
8. The Arbitrator published his final award on 17 th December, 2013, in the following terms:-
"In accordance with the terms of the settlement reached between the Parties, I now Award and Determine by consent as follows:-"
1. The Respondents shall pay to the Claimant the sum of €100,000.00 (One hundred thousand euro) in full and final settlement of all matters referred to me in this Arbitration, and
2. The Respondents shall pay to the Claimant the Claimant's Costs of the Reference on this Arbitration, such costs to be taxed in default of agreement and
And I now Award and Determine as follows;- the Respondents are liable for the Cost of the Award (the cost of the services of the Arbitrator to date) which I have taxed and settled in my determination as set out in my letter to the parties (c/o their respective Solicitors) dated the 13 th December 2013 with attached Statement of Account."
9. The respondents did not move to set aside the arbitration award. The respondents paid the award of €100,000.00 to the petitioner. The respondents and the petitioner did not reach agreement in respect of the costs so the costs were taxed at a hearing before the Taxing Master on 30 th June, 2014. A certificate in respect of the taxed costs issued on 20 th January, 2015 in sum of €75,567.22.
10. After the conclusion of the hearing of 30 th June, 2014, but before the Taxing Master granted the Certificate of costs, the respondents' solicitors wrote on 8 th July, 2014, to both the President of the RIAI and the President of the CIF making an access request under s. 4 of the Data Protection Acts 1988 and 2003 for a copy of any information they respectively kept about the respondents in relation to the matter of the arbitration between Des Hennessey Limited, claimant, and Michael O'Beirne and Anne O'Beirne, respondents, and in particular, any information kept in relation to any consultation between the RIAI and the CIF in respect of the nomination of an arbitrator in the matter. There was no explanation as to why this request was made some 15 months after the respondents had first sought information in relation to this point. Mr. Granby replied on behalf of the RIAI on 22 nd July, 2014. Ms. Alison Irving replied on behalf of the CIF on 31 st July, 2014, enclosing the correspondence referred to above. She stated:-
"Please note that no consultation took place between the Royal Institute of Architects of Ireland and the Construction Industry Federation in respect of the nomination of any particular arbitrator in this matter."
11. The respondents failed to pay the sum...
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