James Nevin v David Clancy and Aveen Kehoe

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 25 April 2008
• Neutral Citation: [2008] IEHC 121
• Court: High Court
• Date: 25 April 2008

[2008] IEHC 121

THE HIGH COURT

No. 35 MCA/2008

No. 36 MCA/2008

No. 43 MCA/2008

Clancy & Kehoe v Nevin & Nevin v Clancy & Kehoe

BETWEEN/

DAVID CLANCY AND AVEEN KEHOE

APPLICANTS

AND

JAMES NEVIN (SENIOR)

RESPONDENT

AND

BETWEEN/

JAMES NEVIN (SENIOR)

APPLICANT

AND

DAVID CLANCY AND AVEEN KEHOE

RESPONDENTS

ARBITRATION ACT 1954 S41

RSC O.56 r4(f)

RSC O.56 r4

ARBITRATION ACT 1954 S38

RSC O.56 r4(e)

ARBITRATION ACT 1954 S39

KELCAR DEVELOPMENTS LTD v MF IRISH GOLF DESIGN LTD UNREP KELLY 9.12.2007 2007 IEHC 468

RUSSELL ON THE LAW OF ARBITRATION 19 ED 1979

BORD NA MONA v JOHN SISK & SON LTD UNREP BLAYNEY 31.5.1990 1990/1/104

CITLAND LTD v KANCHAN OIL INDUSTRIES PVT LTD 1980 2 LLOYD'S REPORTS 274

MUSTILL & BOYD LAW & PRACTICE OF COMMERCIAL ARBITRATION IN ENGLAND 2ED 1989 568

KEENAN v SHIELD INSURANCE CO LTD 1988 IR 89

RULES OF THE SUPERIOR COURTS (ARBITRATION) 2006 SI 109/2006

VOGELAAR v. CALLAGHAN 1996 1 IR 88 1996 2 ILRM 226 1996/15/4783

TOBIN & TWOMEY SERVICES LTD v KERRY FOODS LTD & SULLIVAN 1999 3 IR 483 1998/33/12785

BERNSTEIN HANDBOOK OF ARBITRATION PRACTICE 2ED 1993

BERNSTEIN HANDBOOK OF ARBITRATION & DISPUTE RESOLUTION PRACTICE 4ED 2003 268

ARBITRATION ACT 1954 S38(1)

MCCARTHY v KEANE & ORS 2004 3 IR 617 2005 2 ILRM 241

TRAMOUNTANA ARMADORA SA v ATLANTIC SHIPPING CO SA 1978 2 AER 870

Arbitration

Procedure

Time limits - Set aside award - Extension of time to apply to court - 6 week period within which to initiate application - Applicable test in determining whether to grant extension - Weight to be given to factors - Interests of justice - Likelihood of prejudice - Whether applicant guilty of unreasonable or culpable delay - Whether applicant demonstrated good arguable case on merits that award should be set aside - Bord na Mona v John Sisk & Son Ltd (Unrep, Blayney J, 31/05/1990) followed; Keenan v Shield Insurance Ltd [1988] IR 89 and Tobin and Twomey Services Ltd v Kerry Foods Ltd [1999] 3 IR 48 considered; Vogelaar v Callaghan [1996] 1 IR 88 distinguished; McCarthy v Keane [2004] IESC 104 [2004] 3 IR 617 and Tramountana v Atlantic Shipping [1978] 2 All ER 870 applied - Arbitration Act 1954 (No 26), ss 38 and 41- Rules of the Superior Courts 1986, O 56, r 4(e) - Extension of time to set aside arbitration award refused (2008/35, 36 & 43MCA - Laffoy J - 25/4/2008) [2008] IEHC 121

Clancy v Nevin (snr)

Facts: The Contractor/respondent entered into a building agreement with the claimants/applicants, whereby he agreed to execute certain building works for the claimants. A dispute as to the performance by the Contractor of his obligations under the contract arose and the matter was ultimately referred to arbitration. A settlement agreement was reached, which was not honoured by the Contractor and consequently, the matter proceeded to hearing at a later date before the Arbitrator. The Contractor objected to the Arbitrator hearing the matter on the basis that a letter detailing the settlement agreement had been furnished to the Arbitrator by the claimants and then subsequently withdrew from the hearing. The Arbitrator made an award in favour of the claimants and the award was sent to the solicitors for the claimants and the Contractor on 11 October 2007 upon receipt of payment of the costs of the award by the claimants. The award directed that the Contractor pay the costs of the award, the costs of the reference and the claimant’s costs. The Contractor delayed by approximately two months in entering an appearance to the claimant’s initial application to enforce the award and did not initiate its own proceedings to set aside the award until February 2008. In these applications, the claimants sought leave to enforce in the same manner as a judgment or order the award of the Arbitrator made on 11 July 2007 and leave to enter judgment for the sums representing the award made to the claimants, the Arbitrator’s fees and the costs of the reference. The Contractor sought an order pursuant to Order 56, rule 4 of the Rules of the Superior Courts extending the time in which to apply to set aside the arbitration award and the taxed award of costs and an order setting aside the said arbitration award and taxed award of costs.

Held by Laffoy J. in granting the claimants the relief sought and dismissing the contractor’s application for an order extending the time to set aside the arbitration award: That the award was made and published to the parties on 11 July 2007, notwithstanding the fact that the parties did not receive the award until October 2007. The Contractor was guilty of unreasonable and culpable delay and having regard to his conduct in relation to the resolution of the claimant’s dispute, the interests of justice did not require that the time for the initiation of an application to set aside the award of the arbitrator should be enlarged. His application for an extension of time was wholly unmeritorious.

Reporter: L.O’S.

1 Judgment of Miss Justice Laffoy delivered on 25th April, 2008 .

The proceedings

2 This judgment deals with the following proceedings:

3 (1) An application initiated by originating notice of motion dated 4 ^th March, 2008 (Record No. 2008 35 MCA) in which David Clancy and Aveen Kehoe (the Claimants) seek against James Nevin (Senior) (the Contractor) the following orders:

4 (a) an order pursuant to s. 41 of the Arbitration Act, 1954 (the Act of 1954) and O. 56, r. 4(f) of the Rules of the Superior Courts, 1986 (the Rules) giving the Claimants leave to enforce in the same manner as a judgment or order the award of Ms. Joan O'Connor (the Arbitrator) made on 11 ^th July, 2007;

5 (b) leave to enter judgment for the sum of €508,027.36, being the total amount found by the Arbitrator due and owing to the Claimants from the Contractor, together with interest on the said sum from 11 ^th July, 2007; and

6 (c) leave to enter judgment for the sum of €64,885.16 (including VAT) against the Contractor, being the Arbitrator's fees as paid by the Claimants to the Arbitrator.

7 (2) An application initiated by originating notice of motion dated 4 ^th March, 2008 (Record No. 2008 36 MCA) in which the Claimants seek relief similar to the relief referred to at 1(a) and (b) above in respect of the sum of €220,033.34, being the claimants' costs of the reference to arbitration as taxed by the Arbitrator on 5 ^th December, 2007.

8 (3) An application initiated by originating notice of motion dated 26 ^th March, 2008 (Record No. 2008 43 MCA) wherein the applicant seeks the following orders:

9 (a) an order pursuant to O. 56, r. 4 of the Rules to extend the time in which to apply to set aside the arbitration award made by the Arbitrator on 11 ^th July, 2007 and the taxed award of costs; and

10 (b) an order pursuant to s. 38 of the Act of 1954, as amended, and O. 56, r. 4(e) of the Rules to set aside the said arbitration award and the said taxed award of costs.

11 Initially, the Claimants sought the reliefs referred to at (1) and (2) above by way of two special summonses, the first of which was issued on 12 ^th November, 2007 and was returnable before the Master on 18 ^th January, 2008. The Claimants' solicitors entered an appearance to that special summons on 23 ^rd March, 2007. The relief sought at (3) above was originally claimed by way of special summons which issued on 1 ^st February, 2008, but was not served. It is common case that the incorrect procedure had been adopted by the moving party in each of the applications initially and that the correct procedure was by way of originating notice of motion.

Outline of factual background

12 By a building agreement dated 3 ^rd March, 2003, the Contractor agreed to execute certain building works for the Claimants, that is to say, extensions and alterations to a coach house for conversion to a dwelling house with associated site works at Kellystown House, Kellystown, Slane, County Meath, at the price of €602,411.74 (including VAT). The agreement provided for completion in March, 2004. The Claimants had hoped to move into the property, which was to be their home, in the summer of 2004. It was not to be. A dispute as to the performance by the Contractor of his obligations under the contract arose. Notice of the dispute was served by the Claimants on 4 ^th May, 2005. The Claimants sought to have the dispute referred to conciliation. under the terms of the agreement. Conciliation did not produce a resolution and the dispute was referred to arbitration. The Arbitrator's appointment was by nomination of the President of the Royal Institution of Architects of Ireland by letter dated 11 ^th January, 2006. The terms on which the Arbitrator accepted the nomination, which were agreed by the Claimants and the Contractor, provided, inter alia, that the costs of the reference and the award should be at the discretion of the Arbitrator and that she might tax or settle the amount of costs to be paid or any part thereof and that she might make interim orders for security for any party's own costs and/or to secure all or part of any amount in dispute in the arbitration.

13 It is not necessary to refer to the rather tortuous and contentious process which led to the intended hearing date of 16 ^th May, 2006. Following a pre-hearing meeting on 16 ^th May, 2006, there were discussions between the Claimants and the Contractor and their respective legal advisers and a settlement agreement was executed. The settlement agreement also involved an architect (the Architect) who had been employed by the Claimants to supervise the building works and against whom the Claimants were pursuing a claim arising from alleged breach of contract and negligence. The terms of the settlement agreement were as follows:

14 1. That the Architect would pay the Claimants the sum of €232,500 on or before 26...