Kelcar Developments Ltd v MF Irish Golf Design Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Kelly
• Judgment Date: 19 December 2007
• Neutral Citation: [2007] IEHC 468
• Court: High Court
• Docket Number: [2007 No. 534 SP],534 $P/2007
• Date: 09 December 2007

[2007] IEHC 468

THE HIGH COURT

COMMERCIAL

534 $P/2007

Kelcar Developments Ltd v MF Irish Golf Design Ltd

BETWEEN

KELCAR DEVELOPMENTS LIMITED

APPLICANT

AND

MF IRISH GOLF DESIGN LIMITED

RESPONDENT

RSC O.56

RUSSELL ON THE LAW OF ARBITRATION 19ED 1979

BROOKE v MITCHELL 1840 6 M & W 473

HEMSWORTH v BRIAN 1844 7 MAN & G 1009

VOGELAAR v CALLAGHAN 1996 1 IR 88

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 LLOYDS 274

KEENAN v SHIELD INSURANCE CO LTD 1988 IR 89

LIMERICK CITY COUNCIL v UNIFORM CONSTRUCTION LTD 2007 1 IR 31

MCCARTHY v KEANE & ORS 2004 3 IR 617 2005 2 ILRM 241 2004/33/7696

ARBITRATION

Award

Application to set aside - Time limit - Publication of award to parties - Extension of time - Discretion of court to extend time - Bord na Mona v John Sisk & Son Ltd (Unrep, Blayney J, 31/5/1990) applied; Vogelaar v Callaghan [1996] 1 IR 88 considered; Brooke v Mitchell (1840) 6 M & W 473 and Hemsworth v Brian (1844) 7 Man & G 1009 followed - Rules of the Superior Courts 1986 (SI 15/1986), O 56, r 4 - Extension of time refused and award enforced (2007/534SP - Kelly J - 19/12/2007) [2007] IEHC 468

Kelcar Developments Ltd v MF Irish Golf Designs Ltd

1 Mr. Justice Kelly delivered on the 9th day of December, 2007

2 Three years ago almost to the day, on the 21 ^st of December, 2004, a contract was entered into between MF Irish Golf Design Limited (MF) and Kelcar Developments Limited (Kelcar). The contract was for the construction of a golf course by MF.

3 Having executed the contract, work got underway. Unfortunately disputes arose, the resolution of which was referred to arbitration. The President of the Law Society of Ireland appointed Mr. James O'Donoghue as arbitrator.

4 The arbitrator entered upon the reference and a lengthy hearing took place before him. He made an award on the 22 ^nd May, 2007 in which Kelcar was held liable to MF in the sum of €554, 362.

5 There are three sets of proceedings before me. In the order in which they were instituted they are

6 1. An application by MF seeking to enforce the award of the arbitrator. It was brought by a notice of motion dated the 23 ^rd July, 2007.

7 2. A special summons issued by Kelcar seeking to set aside the arbitrator's award. It is dated the 26 ^th July, 2007. It is accepted by Kelcar that the issue of a special summons was the incorrect procedure to follow.

8 3. A notice of motion, also issued by Kelcar, seeking the same reliefs as in the special summons namely an order setting aside the arbitrator's award. This motion also sought an extension of time for the bringing of the application. The motion is dated the 22 ^nd August, 2007 (the date is given as 2008 but this is a clerical error).

9 The first issue for decision is when did time for the commencement of proceedings seeking to set aside the arbitrator's award begin to run? The first application in time seeking such relief was the special summons of the 26 ^th July, 2007. The second was the notice of motion on the 22 ^nd of August, 2007.

10 The procedure for challenging an arbitrator's award is set out in O. 56 of the Rules of the Superior Courts. The procedure is by motion and the rule sets out the time within which the motion must issue. It reads

"An application by any party to a reference under an arbitration agreement -..."

(c) to remit an award to an arbitrator or umpire, or ...

(e) to set aside an award...may be made by originating notice of motion, to which the other party or parties to the reference... shall be respondent. An application to remit or set aside an award shall be made within six weeks after the award has been made and published to the parties, or within such further time as may be allowed by the court."

11 It is clear that the time fixed by the rules of court is six weeks from the making and publishing of the award in question.

12 The award in this case, which is a lengthy and reasoned one and which found in favour of MF is dated the 22 ^nd of May, 2007. The arbitrator determined that MF be paid the sum of €554, 362 inclusive of VAT, later amended to exclude VAT - nothing turns on that - and further determined that Kelcar bear the costs of the award.

13 The award was made on the 22 ^nd May, 2007. The arbitrator's signature is appended and witnessed on that date. The award is described as a partial award but it is clear that it is final save for the question of taxation of costs. It deals with all questions of liability and also who should bear the costs of the reference. There can be no doubt but that the award was made on the 22 ^nd May, 2007.

14 The argument of Kelcar is that the award was not published to them on that date. It argues that time only began to run on the 20 ^th June, 2007 when Kelcar took up a copy of the award. That being so it is said that the issue of the special summons, albeit incorrect, was within time and thus an extension of time should be accorded to Kelcar in respect of its subsequent use of the correct procedure. This all begs the question as to what is meant by an award being "made and published to the parties".

15 I am quite satisfied that Kelcar's submission to the effect that publication only took place on the 20 ^th June, 2007 when it took up a copy of the award is not well founded in law.

16 The matter is dealt with succinctly in the 19 ^th Ed. of Russell on Arbitration. There the learned authors say as follows:-

"'Publication to the parties' of an award (as distinct from 'publication' of it simply) entails both completion of the award, so that the arbitrator has finally adjudicated and retains no power of altering it, and also notice to the parties that this has been done. It is immaterial, however, whether or not the parties are then made acquainted with the contents of the award or receive copies of it."

17 Two authorities namely Brooke v. Mitchell decided in 1840 and Hemsworth v. Brien decided in 1844 are cited as authority for that proposition. The issue is also dealt with in the decision of Vogelaar v. Callaghan which I will cite later and which supports my view.

18 It is plain that publication of an award to the parties arises when the arbitrator makes his award and notifies the parties of that fact. Notification was sent to both parties on the 22 ^nd May, 2007. Kelcar's submission that publication to it only took place on the 20 ^th June, 2007 when it took up a copy of the award is not well founded in law. The authorities on the topic go back well in excess of a century and a half. It follows that publication of the award took place on the 22 ^nd May, 2007. Therefore the latest date for commencement of proceedings to set aside the award was the 3 ^rd July, 2007. No such proceedings were commenced until the 26 ^th July, 2007 and then they were incorrect in form. I'm now asked to exercise my discretion to extend time to enable the substantive application to set aside the award to proceed.

19 On a strict construction proceedings to set aside the award were not instituted until the issue of the motion on the 22 ^nd August, 2007. I think I ought to take the more benign view and regard the special summons as actual notice of the proceedings to MF. So, effectively, I am asked to extend time from the 3 ^rd to the 26 ^th July, 2007.

20 A three week extension of time may not seem much in the ordinary course of events but it must be considered in the context of the very limited time allowed in arbitration proceedings. The extension sought is in excess of 50% more than the time allowed.

21 I am asked to exercise my discretion on the basis of a number of cases. The first is the decision of Barron J. in Vogelaar v. Callaghan [1996] 1 I.R. 88 in which he stated

"The defendant submits that the application is out of time. By O. 56, r. 4 of the Rules of the Superior Courts, 1986, an application to set aside an arbitrator's award must be made within six weeks after the award has been made and published to the parties, or within such farther time as shall be allowed by the court. The authorities show that the period of six weeks runs not from the time when the parties received copies of the award or became aware of its contents but from the date when it was actually made. In the present case that date was the 27 ^th March, 1995 and accordingly the proceedings have not been brought within the six week time period."

22 In answer to this submission counsel for the plaintiff relies upon the judgment of Parker J. in the "Archipelagos" World Transport Corporation v. Sissy Steamship Company (1979) 2 Lloyds Reports 289 in which he reviews the authorities from which the rule relied upon by counsel for the defendant had been established. Parker J. accepted that there were passages in earlier judgments which might qualify the rule, but nevertheless held that since the rule had been in existence and followed for 140 years, he would not in any event have altered it. In his view to do so would have meant that time would not begin to run for a wholly indefinite period if neither side took up the award. Before exercising discretion to extend the time, he held that an adequate explanation for the delay had to be given. Although the only explanation given was ignorance of the rule that time ran from the date of the making of the award had been made known to the parties, time was extended because the delay was only for four days and solicitors were abroad."

23 I interpose to say here that the time extension sought here is substantially in excess of four days. Barron J. went on:

"in the present case, those advising the plaintiffs were equally unaware of the rule. They clearly thought the six...