Desmond Buchanan and Another v B.H.K. Credit Union Ltd and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Hogan
• Judgment Date: 24 September 2013
• Neutral Citation: [2013] IEHC 439
• Court: High Court
• Date: 24 September 2013

Buchanan v BHK Credit Union Ltd & Ors

BETWEEN

DESMOND BUCHANAN AND LINDA BUCHANAN

PLAINTIFFS

AND

B.H.K. CREDIT UNION LIMITED, JOHN CLARKE AND SON (ARDEE) LIMITED

DEFENDANTS

AND

BRENDAN G. CASHELL AND DUFFY CHARTERED ENGINEERS

THIRD PARTIES

[2013] IEHC 439

[No. 5552 P/2010]

THE HIGH COURT

Third party notice - Indemnity and contribution - Delay - Time limit - Notice served ‘as soon as reasonably possible’ - Prejudicial effect - Rules of the Superior Courts 1986 - Civil Liability Act 1961

In 2005, BHK Credit Union Limited decided to demolish and redevelop its premises in Louth. BHK hired John Clarke and Son (Ardee) Limited to conduct this task. Brendan G. Cashell was nominated as the project”s architect. The plaintiffs were the owners of a public house adjacent to the BHK Credit Union property. They claimed that in March 2006 that their public house was damaged as a result of the construction work being carried out on BHK”s premises. They also complained that their property deteriorated as a result of the construction to the extent that the public house would be required to close for a period of six weeks so that extensive repairs could be carried out.

This case concerned an application under Order 16, r. 8 (3) of the Rules of the Superior Courts 1986, to set aside an order of the court made in July 2012, which made Brendan G. Cashell a third party to these proceedings. Mr Cashell argued that third party notice was not served as soon as reasonably possible, and that it failed to meet the twenty eight day requirement of the Rules of the Superior Courts. Moreover, Mr Cashell argued that the time lapse would have a prejudicial effect on his ability to defend the proceedings.

Held by Hogan J that two key issues arose in this case; firstly, whether it was relevant that the third party notice was not served in the twenty eight day period as specified by Order 16, r. 1(3) of the Rules of the Superior Courts 1986; and, secondly, was the third party notice served ‘as soon as reasonably possible’, under section 27 (1) (b) of the Civil Liability Act 1961?

Concerning the twenty eight day period specified in the Rules of the Superior Courts, it was decided that this was a starting point, and that it could not serve to dispose of the separate question of whether section 27 (1) (b) was complied with, and was therefore, not relevant. The court also held that, with regard to the ‘as soon as reasonably possible’ requirements under section 27 (1) (b) of the Civil Liability Act 1961, that there were two key items of delay. The first, lasting from November 2010 until May 2011 was decided not to be unreasonable due to BHK awaiting a reply to the serving of the statement of claim in November 2010. The second period of delay, which lasted from May 2011 to July 2012, was found to primarily be a result of John Clarke”s defence not being made available to BHK until April 2012. As such, the court decided that whilst the delays were unfortunate, mitigating factors served to both excuse and justify the delay, and that therefore, it could not be said that BHK did not act ‘as soon as reasonably possible’. Moreover, it was found that the delays were not inherently prejudicial to Mr Cashell to the extent that his constitutional rights were compromised.

The court therefore refused to set aside the third party notice.

RSC O.16 r8(3)

CIVIL LIABILITY ACT 1961 S27(1)(B)

RSC O.16 r1(3)

GOLDEN VALE PLC v FOOD INDUSTRIES PLC (ORSE FOOD INDUSTRIES LTD) 1996 2 IR 221 1996/11/3609

ROBINS v COLEMAN & ORS 2010 2 IR 180 2009/49/12307 2009 IEHC 486

S DOYLE & SONS ROSCOMMON LTD v FLEMCO SUPERMARKET LTD & JJ RHATIGAN & CO LTD UNREP LAFFOY 2.12.2009 2009/51/12883 2009 IEHC 581

COURTS OF JUSTICE ACT 1924 S36

GOKUL & ORS v AER LINGUS PLC UNREP HOGAN 9.9.2013 2013 IEHC 432

CONSTITUTION ART 15.2.1

COOKE (AN INFANT) v WALSH 1984 IR 710

FRESCATI ESTATES LTD v WALKER 1975 IR 177

BOARD OF GOVERNORS OF ST LAURENCES HOSPITAL v STAUNTON 1990 2 IR 31 1989 ILRM 877 1989/6/1838

CONNOLLY v CASEY & MURPHY T/A CASEY & MURPHY SOLICITORS 2000 1 IR 345 2000 2 ILRM 226 2000/3/1120

ROBINS v COLEMAN 2010 2 IR 180 2009/49/12307 2009 IEHC 486

MOLLOY v DUBLIN CORP & ORS 2001 4 IR 52 2002 2 ILRM 22 2003/38/9025

EBS BUILDING SOCIETY v LEAHY & ORS (T/A LEAHY & PARTNERS) UNREP HOGAN 6.12.2010 2010/18/4382 2010 IEHC 456

SFL ENGINEERING LTD v SMYTH CLADDING SYSTEMS LTD UNREP KELLY 9.5.1997 1998/10/2952

TUOHY v NORTH TIPPERARY CO COUNCIL UNREP PEART 10.3.2008 2008/60/12547 2008 IEHC 63

MURNAGHAN v MARKLAND HOLDINGS LTD & ORS UNREP LAFFOY 10.8.2007 2007/43/8921 2007 IEHC 255

GREENE v TRIANGLE DEVELOPMENTS LTD & WADDING UNREP CLARKE 4.3.2008 2008/27/5935 2008 IEHC 52

CONSTITUTION ART 34.1

DOYLE v GIBNEY & ORS 2012 1 ILRM 194 2011/15/3568 2011 IEHC 10

EAST DONEGAL CO-OPERATIVE LIVESTOCK MART LTD & ORS v AG 1970 IR 317

1 1. This is an application, pursuant to 0. 16, r. 8(3) RSC, to set aside an order of this Court joining Brendan G. Cashell as a third party to these proceedings. That order was made in this Court (Cross J.) on the 23 ^rd July, 2012. This third party notice claiming indemnity and contribution was served on 9 ^th August 2012 by the first named defendant, BHK Credit Union Ltd. ("BHK"). Mr. Cashell, who is an architect, maintains that the third party notice was not served "as soon as reasonably possible" in the manner required by s. 27(1 )(b) of the Civil Liability Act 1961 ("the 1961 Act"). It is also contended that the notice did not comply with the requirement of O. 16, r. 1(3) in that the application for leave to issue the notice was not made within twenty eight days from the date limited for the delivery of the defence. The issue arises in the following way.

2 2. In the second part of 2005 BHK sought to proceed with plans to demolish and to re-develop its existing premises at Blackrock, Co. Louth and it retained the second defendant, John Clarke & Son (Ardee) Ltd. ("John Clarke") as the main contractor for this purpose. The plaintiffs in this action are a married couple who are the owners of a public house immediately adjacent to BHK's premises. Mr. Cashell was the nominated architect for the project.

3 3. According to their statement of claim filed on 30 ^th July 2010, the plaintiffs contend that in March 2006 their public house premises was damaged in the course of the demolition and refurbishment work on the BHK property. The plaintiffs further contend their premises has deteriorated gradually as a result of these building works, with new cracking visible and any existing cracks deteriorating further. It is further pleaded that the premises will have to close for six weeks to enable repair extensive repair works to be carried out. It is perhaps appropriate to record that the plaintiffs have taken no part in the hearing of this application regarding the set aside of the third party notice.

4 4. Any judgment on the merits of these claims (or, for that matter, the defence of the various defendants and prospective third parties) will naturally have to await the outcome of the main proceedings, but is sufficient for present purposes to refer to these claims since they form the backdrop to the present application. Before proceeding to consider the substance of the set aside application, it is, however, first necessary to fill in further details regarding the rather complex chronology of the proceedings.

The defence of BHK

5 5. The proceedings were commenced on 10 ^th June 2010 and the proceedings were served on 11 ^th October 2010. An appearance was entered by BHK on 1 ^st November 2010. While there is a dispute as to when exactly the statement of claim was served on BHK, it is accepted that the service of the statement of claim on this particular defendant was certainly no later than 12th November 2010. At that point BHK then served a detailed notice for particulars (running to some 28 paragraphs) shortly thereafter. These requests were not immediately replied to and a motion was then issued on 23 ^rd February 2011. The motion was made returnable for the 9 ^th May 2011 and the replies were furnished on the 5 ^th May 2011.

6 6. While BHK filed a defence on 5 ^th July 2011, it seems evident that their legal advisers must have been at least contemplating prior to that point whether Mr.Cashell should be joined as a third party. On the 20 ^th May 2011 BHK's solicitors requested that Mr. Cashell supply them with a copy of his files. Mr. Cashell replied on 30 ^th May 2011 confirming receipt of the request. He indicated that he had a vast volume of paperwork and that while he was prepared to hand over the relevant documentation, he sought assurances regarding the time-frame for doing so and the costs which were thereby involved.

7 7. BHK also separately sought voluntary discovery from John Clarke a few weeks later on 26 ^th July 2011. With this request for discovery, BHK sought material relating, inter alia, to Mr.Cashell's involvement in the building project, including the instructions which he had given in relation to the demolition and building works. In the absence of agreement, BHK then sought an order for discovery, which order was subsequently made on 21 ^st November 2011.

The defence of John Clarke

8 8. Although John Clarke delivered a defence on 11 ^th November 2011 a copy of this was only supplied to BHK's solicitors by the plaintiff's solicitors on 4 ^th April 2012. The terms of that defence appear to have come as a surprise to BHK, because John Clarke pleaded that it had no role in the design, planning or structural assessments which were involved in the demolition and construction of the site. John Clarke thus contended that if the plaintiffs had suffered any loss by reason of the interference with the right of support enjoyed by their building, this was the responsibility of BHK and its...