James Elliott Construction Ltd v Lagan

JurisdictionIreland
JudgeMs. Justice Costello
Judgment Date02 November 2016
Neutral Citation[2016] IEHC 599
Docket Number[2014 No. 2229 P.]
CourtHigh Court
Date02 November 2016
BETWEEN
JAMES ELLIOTT CONSTRUCTION LIMITED
PLAINTIFF
AND
KEVIN LAGAN
TERRY LAGAN
JOHN GALLAGHER
IRISH ASPHALT LIMITED
LAGAN CEMENT GROUP LIMITED
DEFENDANTS

[2016] IEHC 599

[2014 No. 2229 P.]

THE HIGH COURT

COMMERCIAL

Practice & Procedures – O.36, r. 9 and O.63A, r. 5 of the Rules of the Superior Courts – Modular trial – Saving of time and costs of the parties – Prejudice – Fair trial – Credibility of the witness – Nature of claim – Interests of justice

Facts: The plaintiff sought an order under o. 36, r. 9/o.63A, r. 5 of the Rules of the Superior Court or under the inherent jurisdiction of the Court directing the issues of the liability and quantum in the proceedings to be tried separately and to have a modular trial. The plaintiff submitted that a split trial on the issues of liability and quantum of damages would be a potential saving of time of the Court and the costs of the parties as the litigation was complex, lengthy and commercial. The defendants argued that it would not be possible on the facts of the present case to separate the actual proof of damage from the quantification because of the nature of the loss claimed. The defendants claimed that the plaintiff had inflated the damages and the credibility of the witness would not be possible in a modular trial.

Ms. Justice Costello refused to grant the relief sought by the plaintiff on the ground that an order for modular trial would not result in a just and fair trial to the defendants and that the defendants would be prejudiced in the case. The Court held that despite the fact that there was a scope of modular trial to save time and costs of the parties, the Court must take into consideration the administration of justice and fair trial to both the parties. The Court held that the credibility of the witness was a crucial factor in the present case and that the defendants would be prejudiced in their ability to challenge the witness' credibility on issues relating to liability if the issues in relation to quantum were to be removed from the first module when the liability was to be determined. The Court found that the nature of the claim in the present case was such that an order for modular trial would be inappropriate.

JUDGMENT of Ms. Justice Costello delivered on the 2nd day of November, 2016
Introduction
1

This is an application brought by the plaintiff seeking an order pursuant to O. 36, r.9 and/or O.63A, r.5 of the Rules of the Superior Courts or pursuant to the inherent jurisdiction of the Court directing that the issues of liability and quantum in these proceedings be tried separately. I have already given a number of judgments in relation to interlocutory motions in these proceedings and the facts are more fully set out in those judgments. The proceedings have been under case management for some time.

2

The plaintiff is a construction company and it purchased aggregate from the fourth named defendant which it says was contaminated by pyrite. The plaintiff says that it used the aggregate in 16 developments set out in the schedule to the pleadings and damage has either been caused, or it is anticipated will follow in respect of all 16 developments. The plaintiff sues the defendants for the tort of deceit in supplying the aggregate from the quarry operated by the fourth named defendant at Bay Lane, Co. Dublin. The plaintiff alleges that the other defendants were also guilty of fraud in supplying the material from the Bay Lane quarry to the plaintiff. The plaintiff claims €17,000 as the costs incurred in remediation works to date; €500,000 in respect of the costs of the purchase of defective material; an indemnity in respect of future claims which may arise in respect of the scheduled developments and consequential losses. The consequential losses are identified as €17,049,522 in respect of the impact on retained profit, €3,300,000 claimed in respect of inability to tender, and €20,000,000 in respect of the purchase of a new company, which would allow the plaintiff to re-enter the market. The plaintiff also seeks aggravated and exemplary damages.

3

The defendants deny all of the allegations and raise a number of preliminary points by way of defence. The defendants submit that the plaintiff is itself guilty of contributory negligence. They submit that the plaintiff is guilty of laches and acquiescence and that it has not come to court with clean hands, and therefore it is not entitled to any equitable reliefs.

4

On 15th June, 2016, I gave a judgment on the applications for discovery in the proceedings. The order was perfected on 28th July, 2016, and the plaintiff was ordered to make discovery of documents set out in Category 42 in respect of the fourth named defendant and Category 10 in respect of the other defendants within 4 months. These categories are very broad and relate to documents evidencing or relating to the losses claimed by the plaintiff. In addition to seeking the order for a split trial, the plaintiff also sought an order staying any obligation to make discovery of documents relating to these two categories of discovery until the issue of liability is finally disposed of.

The law
5

It was accepted by the parties that the Court has jurisdiction to make the order sought pursuant to the rules identified in the notice of motion and the inherent jurisdiction of the Court. It was also agreed that the relevant authorities were Cork Plastics (Manufacturing) & Ors. v. Ineos Compound UK Limited & Ors. [2008] IEHC 93, McCann v. Desmond [2010] 4 I.R. 554, and Weavering Macro Fixed Income v. PNC Global Investment [2012] 4 I.R. 681. I therefore do not propose to repeat or reproduce the principles set out in those judgments. It was agreed by the parties that the default or normal position is that there should be a unitary trial. A modular trial may be ordered if it is just and convenient or, in the words of O.63A, r.5.as appears convenient for the determination of the proceedings in a manner which is just, expeditious and likely to minimise the costs of those proceedings.’ It was also accepted that in deciding the issue, the Court must consider the interests of the plaintiff, the interests of the defendants and the interests of the administration of justice insofar as it is always desirable that scarce court resources should not be taken up by matters which would ultimately prove to be unnecessary. It was agreed that the burden of satisfying a court that a modular trial should be directed rested upon the moving party.

The plaintiff's case
6

Much of the debate at the hearing of the motion related to the grounds upon which the defendants objected to the plaintiff's motion. I shall return to these in due course. This should not distract from the fact that primarily the Court must first consider the case advanced by the moving party in support of the application. Two affidavits were sworn by solicitors on behalf of the plaintiff in the motion. Mr. Darragh O'Donovan, in his affidavit of 4th July, 2016, identified two grounds. At para.5, he identifies the order for discovery in respect of categories 42 and 10, referred to above, as providing the first of several reasons why splitting the issues of liability and quantum into separate trials makes good sense. He envisages the issues of liability and causation being dealt with in the first module, and the issue as to the extent of damage resulting from the use of the product sold to the plaintiff by the defendants, being dealt with in the second module. He states that the discovery sought in respect of categories 42 and 10 (the losses categories) will involve considerable time and expense. For this reason, the plaintiff also applied for a stay on the obligation to make this discovery until after the question of liability has been determined. He states that the saving of this time and expense is only one aspect of the cost of dealing with quantum and liability together.

7

Mr O'Donovan submits that if the trial were split there would be a potential of saving a great deal of time and resources of all of the parties concerned. He submits that the issue of the extent of the damage suffered by the plaintiff will give rise to considerable and extensive dispute between the parties and their experts, and that this reason alone provides a strong reason why a liability – quantum split trial ought to be considered by the Court. If the plaintiff were to fail in establishing liability, then all of the costs incurred in preparing the quantum aspects of the case on both sides will have been in vain.

8

Ms. Christian Carroll swore a further affidavit on behalf of the plaintiff on 14th September, 2016. She states that while it is difficult to be precise as to the estimate of the trial duration, she estimates that the liability trial will be lengthy and complex and the quantum trial will also take a number of weeks of additional court time which she believes may be approximately 3 weeks. She states this is a block of time and associated costs that will be saved if the order sought is granted.

9

In Counsel's submissions to the Court, it was argued that there was a public interest in the efficient use of court time and that the Court's primary consideration on the motion is the administration of justice. This encompasses the efficient use of court time and potential saving of costs. It was submitted that the quantum issues would be complex, would require expert evidence from a number of witnesses, and what would be saved by a modular trial is the possibly unnecessary quantum hearing in the event that the plaintiff is unsuccessful both at first instance, and on appeal.

10

In reply to the submissions of the defendants, counsel for the plaintiff withdrew the request to postpone the plaintiff's obligation to make discovery in respect of categories 42 and 10, the second relief sought in the notice of motion. This has two...

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3 cases
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    • November 2, 2021
    ...the court's attention was drawn to the decision of Ms. Justice Costello in James Elliott Construction Limited v Lagan & Ors. [2016] IEHC 599 which concerned an application brought by the plaintiff in those proceedings seeking an order pursuant to O. 36, r. 9 and/or O. 63A, r. 5 of the RSC o......
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    ...Ltd. (in liquidation) v. PNC Global Investment Servicing (Europe) Ltd. [2012] 4 I.R 681 and James Elliott Construction Ltd. v. Lagan [2016] IEHC 599 (“ James 28 The following principles regarding modularising trials, which are relevant to this case, can be extracted from this case law: i. T......
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    ...Cork Plastics (Manufacturing) & ors v. Ineos Compound UK Ltd & ors [2008] IEHC 93, James Elliott Construction Limited v. Lagan & ors [2016] IEHC 599, McCann v. Desmond [2010] 4 I.R. 554, Donatex Limited v. Dublin Docklands Development Authority [2011] IEHC 538, and Novartis Pharma AG v. Eli......

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