ECI European Chemical Industries Ltd v McBauchemie Muller GmbH and Company

• Jurisdiction: Ireland
• Judge: Mr. Justice Geoghegan
• Judgment Date: 14 March 2006
• Neutral Citation: [2006] IESC 15
• Court: Supreme Court
• Docket Number: [S.C. No. 285 of
• Date: 14 March 2006

ECI EUROPEAN CHEMICAL INDUSTRIES LTD v MC BAUCHEMIE MULLER GMBH & CO

BETWEEN/

ECI EUROPEAN CHEMICAL INDUSTRIES LIMITED

Respondent/Plaintiff

and

MC BAUCHEMIE MÜLLER GmbH AND COMPANY

Appellant/Defendant

[2006] IESC 15

Hardiman J.

Geoghegan J.

Fennelly J.

Record No. 285/05

THE SUPREME COURT

PRACTICE AND PROCEDURE:

Third party

Concurrent wrongdoer - Claim for contribution in prior proceedings - Joinder of third party - Whether done as soon as reasonably possible - Whether claim for contribution barred by non-joinder of third party in prior proceedings - Whether third party notice served as soon as reasonably possible - Whether issue of service of third party notice as soon as reasonably possible res judicata - Whether plaintiff disentitled to maintain proceedings - Preliminary issue - McElwaine v Hughes (Unrep, Barron J,30/4/1997) followed - Civil Liability Act 1961 (No 41), s 27 - Appeal allowed (285/2005 - SC - 14/3/2006) [2006] IESC 15, [2007] 1 IR 156, [2006] 2 ILRM 19

ECI European Chemical Industries Ltd v MC Bauchemie Muller Gmbh

Facts: The issue was whether the plaintiff's claim against the defendant claiming indemnity/contribution on a concurrent wrongdoer basis ought to be refused by the Court in the exercise of its discretion under s. 27(1)(b) of the Civil Liability Act 1961 in circumstances where the Court had already determined in the underlying proceedings that the plaintiff failed to serve a third party notice upon the defendant as soon as reasonably possible as required by the provisions of the Civil Liability Act 1961.

Held by the Supreme Court (Hardiman J; Geoghegan and Fennelly JJ) in allowing the appeal but ordering a new hearing of the issue in the High Court that the clear purpose of the legislation was to ensure that as far as possible third party issues would be heard in the original plaintiff's action. If there was no good reason why a third party notice could not have been served in accordance with the Act in most cases the proceedings should be rejected.

Reporter: R.W.

CIVIL LIABILITY ACT 1961 S27(1)(b)

CIVIL LIABILITY ACT 1961 S27(1)(a)

MCELWAINE v HUGHES UNREP HIGH COURT BARRON 30.4.1997 1998/25/9740

GOVERNORS OF ST LAURENCES HOSPITAL v STAUNTON 1990 2 IR 31

GILMORE v WINDLE 1967 IR 323

CONNOLLY v CASEY & MURPHY & FITZGIBBON UNREP HIGH COURT KELLY 12.6.1998 1998/14/4845

DELANY & MCGRATH CIVIL PROCEDURE IN THE SUPERIOR COURTS 2ED 2005 CHAPTER 9

TORTFEASORS ACT 1951 S5

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

MOLLOY v DUBLIN CORPORATION & ORS 2001 4 IR 52 2002 2 ILRM 22

1 JUDGMENT of Mr. Justice Geoghegan delivered the 14th day of March 2006

2 This is an appeal from an order of the High Court determining two preliminary issues which had been directed to be heard in an action by the respondent against the appellant claiming indemnity/contribution on a concurrent wrongdoer basis in respect of any potential liability on the part of the respondent in an action entitled "The High Court, Record No. 3753P/1995, Between: Vincent Donnelly - Plaintiff and Structural Concrete Bonding Services Limited, Ove Arup Jones Lang Wooten and ECI European Chemical Industries Limited - Defendants". The respondent had earlier obtained leave to issue and serve a third-party notice on the appellant. After such notice was served, the appellant successfully made an application to have the third-party notice set aside on the grounds that it had not been served "as soon as is reasonably possible" within the meaning of section 27(1)(b) of the Civil Liability Act, 1961.

3 The two issues set down and determined were as follows:

4 1. Whether in circumstances where the plaintiff has already made a claim for contribution against it in proceedings entitled "The High Court, Record No. 1995 No. 3753P, Between: Vincent Donnelly û Plaintiff and Structural Concrete Bonding Services Limited, Ove Arup, Jones Lang Wooten and ECI European Chemical Industries Limited û Defendants" ("the underlying proceedings"), the plaintiff is disentitled by virtue of section 27(1)(b) of the Civil Liability Act, 1961 to maintain these proceedings against the defendant.

5 2. Whether the plaintiff's claim herein ought to be refused by this court in the exercise of its discretion under section 27(1)(b) of the Civil Liability Act, 1961 in circumstances where this court has already determined in the underlying proceedings that the plaintiff failed to serve a third-party notice upon the defendant as soon as reasonably possible as required by the provisions of the Civil Liability Act, 1961.

6 The learned trial judge reluctantly gave negative answers to both questions. The appellant has appealed that decision to this court.

7 To understand how the questions arise it is important that I cite in full section 27(1) of the Civil Liability Act, 1961. That subsection reads as follows:

"(1) A concurrent wrongdoer who is sued for damages or for contribution and who wishes to make a claim for contribution under this Part û"

(a) shall not, if the person from whom he proposes to claim contribution is already a party to the action, be entitled to claim contribution except by a claim made in the said action, whether before or after judgment in the action; and

(b) shall, if the said person is not already a party to the action, serve a third-party notice upon such person as soon as is reasonably possible and, having served such notice, he shall not be entitled to claim contribution except under the third-party procedure. If such third-party notice is not served as aforesaid, the court may in its discretion refuse to make an order for contribution against the person from whom contribution is claimed."

8 As can be seen quite clearly there is no ambiguity in paragraph (a). If a defendant wants to make an indemnity or contribution claim in a concurrent wrongdoer capacity against a co-defendant he must make his claim within the same proceedings. He is precluded from bringing a separate action.

9 Paragraph (b) however, deals with a different situation. This is where the indemnity or contribution claim is made against somebody who is not a party to the action. The first part of that paragraph mandates the defendant claimant to serve a third-party notice upon the non-party against whom the claim is being made "as soon as is reasonably possible". Unlike paragraph (a) however, paragraph (b) does not prescribe that the claim for contribution may only be brought by way of third-party proceedings and not by a separate action. If the paragraph had contained only its first sentence, such a requirement might be taken as implied. It has been held in this court, however, that the second sentence in paragraph (b) must necessarily lead to the conclusion that a claimant who does not serve the third-party notice as soon as is reasonably possible and, therefore, does not comply with the first part of the sentence is not necessarily precluded from making an indemnity or contribution claim by separate action but such claim may be refused by the court as a matter of discretion.

10 The first of the two questions determined by the High Court does not present me with any difficulty and I can deal with it quite shortly. Essentially, the issue here is whether even if it is the case that where a third-party notice is not served the claimant is not necessarily precluded from making the claim by separate action depending on the discretion of the court, that is not so if, in fact, a third-party notice was served as in this case but later set aside. I should mention in passing that no appeal was taken from the order setting aside the third-party notice.

11 This precise issue is adverted to in the unreported judgment in the High Court of Barron J., delivered the 30th April, 1997 in McElwaine v. Hughes. At the bottom of p. 278 of his judgment Barron J. having established that while a court should not construe "as soon as is reasonably possible" too liberally, it should not at the same time be too astute to set aside a third-party notice on such grounds and went on to observe as follows:

"O'Keeffe J. in Gilmore v. Windle (cited earlier in the judgment as [1967] I.R. 323) suggested a further hurdle by indicating that a defendant who serves a Third-Party Notice subsequently set aside for not having been served as soon as reasonably possible might be barred from bringing separate proceedings. However it seems to me that the provision in the subsection which appears to so provide is intended to apply only where the procedure laid down by that subsection has been followed with a valid Third-Party Notice."

12 I am in complete agreement with that passage in the judgment of Barron J. It would be wholly wrong in principle if a person who defectively served a third-party notice which was subsequently set aside was left in a different position from a claimant who did not serve a third- party notice of any kind. I do not think I need to say anything more about the first of the two issues. I would uphold the negative answer given by the learned...