McTIERNAN v QUIN-CON DEVELOPMENTS (WATERFORD) Ltd and Others

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 17 April 2007
• Neutral Citation: [2007] IEHC 142
• Court: High Court
• Date: 17 April 2007

[2007] IEHC 142

THE HIGH COURT

RECORD NO. 2001/17886 P

MCTIERNAN v QUIN-CON DEVELOPMENTS (WATERFORD) LTD & ORS

BETWEEN/

TADHG McTIERNAN AND NELLY McTIERNAN

PLAINTIFFS

AND

QUIN-CON DEVELOPMENTS (WATERFORD LIMITED) AND LL LOCATION LIMITED

AND BY ORDER

NEIL BREHENY AND JOSEPHINE BREHENY, EAMONN McSWEENEY AND DESCON CONSTRUCTION LIMITED

DEFENDANTS

RSC O.7 r3

SHINEDEAN LTD v ALLDOWN DEMOLITION (LONDON) LTD (IN LIQUIDATION) 2006 1 WLR 2696

CIVIL LIABILITY ACT 1961 S62

RSC O.7 r3(1)

O FEARAIL v MCMANUS 1994 2 ILRM 81 1995 4 1362

BYRNE v JOHN S O'CONNOR & CO SOLICITORS & ADMIRAL UNDERWRITING AGENTS (IRELAND) LTD UNREP SUPREME 15.5.2006 2006 IESC 30

RSC O.15 r13

PRACTICE AND PROCEDURE

Legal representation

Application to come off record - Insurer's indemnity withdrawn - Delay in bringing application - Whether conditions as to costs should be attached to grant of application - O'Fearail v McManus [1994] 2 ILRM 81; Byrne v John S O'Connor & Co [2006] IESC 30, [2006] 3 IR 379 applied - Rules of the Superior Courts 1986 (SI 15/1986), O 7, r 3 - Order allowing solicitors to come off record granted conditional on payment of certain costs (2001/17886P - Laffoy J - 17/4/2007) [2007] IEHC 142

McTiernan v Quin-con Developments (Waterford Ltd) and Ors

The applicants were the solicitors on record for the First Defendant. They applied for an order pursuant to O.7, r. 3 of the Rules of the Superior Courts to come off record for the First Defendant. The application was predicated on the policy of insurance having been repudiated and their client, the insurer, no longer having an interest in the proceedings.

Held by Laffoy J. in allowing the applicants to come off record that a “forced form of liaison” could not be imposed on the applicants. However, the insurer had to bear liability for such costs as had been incurred by the Plaintiffs in processing their claim against the First Defendant as represented by the insurer and the applicants for the period during which the insurer was in default. Moreover, the costs of all parties answering the motion had to be borne by the insurer.

Reporter: R.W.

1 Judgment of Miss Justice Laffoy delivered on 17th April, 2007 .

The application

2 This is an application by O'Rourke Reid (the applicants), the solicitors on record for the first defendant, for an order pursuant to O. 7, r. 3 of the Rules of the Superior Courts, 1986 and/or pursuant to the inherent jurisdiction of the court declaring that the applicants have ceased to act for the first defendant and for an order permitting the applicants to come off record for the first defendant. In addition to hearing submissions on behalf of the applicants, the court also heard submissions on behalf of the plaintiffs, the second, third, fourth and fifth defendants, all of whom are now represented by the same firm of solicitors, and on behalf of the sixth defendant.

3 The context in which the application is brought is more complicated than one usually encounters on an application under O. 7, r. 3. Accordingly, it is necessary to consider the proceedings in some detail and the history of this application.

The proceedings

4 The proceedings were commenced by plenary summons which issued on 7th December, 2001. Initially there were two defendants in the proceedings, the first and second defendants. On 18th December, 2001 a firm of solicitors entered an appearance on behalf of the first defendant. Subsequently, on 14th February, 2002 notice of change of solicitor was filed and since then the applicants have been on record for the first defendant.

5 The plaintiffs are the owners and occupiers of premises known as 5 Canada Street in Waterford, where they carry on a veterinary practice. The first defendant is a building contractor and the second defendant is the owner of the premises known as 3-4 Canada Street. The proceedings arose out of the demolition and development of 3-4 Canada Street in or about the month of March, 2001, which works it is alleged were carried out by the first defendant under contract with the second defendant. In broad terms, the plaintiffs say that their premises at 5 Canada Street were damaged and their business was disrupted due to the negligence, nuisance and breach of duty of the first and second defendants in carrying out the said works and that they are entitled to injunctive relief and damages. The applicants were instructed to represent the first defendant in this matter by Orr Risk Management, a Dublin-based firm, who, in turn, were instructed by U.K.-based underwriters, General Star Insurance Company Limited (the insurer), which insured the first defendant.

6 By an order of this Court (Kelly J.) made on 24th November, 2003 the third, fourth, fifth and sixth defendants were added as defendants in the action on application of the plaintiffs. The third and fourth defendants are former owners and occupiers of 3-4 Canada Street, being predecessors in title of the second defendant. The fifth defendant is a consulting engineer, whom it was alleged was retained by the third and fourth defendants in relation to works of construction, demolition and piling of 3-4 Canada Street and the sixth defendant is a company which it is alleged carried out the piling works on behalf of the third and fourth defendants. Notices for contribution and/or indemnity have been served by most, if not all, of the other defendants on the first defendant. On the basis of the documentation before the court, the position is not clear in relation to the sixth defendant.

7 In any event, before the third to sixth defendants were joined and before any such notices were served, the first defendant had failed to comply with an order for discovery made by the Deputy Master on 21st January, 2003. By order of this Court (Kelly J.) made on 7th July, 2003 (the perfected order being subsequently amended by an order made by this Court (Kelly J.) on 30th January, 2004) it was ordered that, unless the first defendant should make discovery in accordance with the order of 21st January, 2003 within twenty-one days of the date of the order, the defence of the first defendant should stand struck out. It was further ordered that in that event the first defendant should have permanent injunctions, both prohibitory and mandatory, in the terms of the injunctive relief sought in the statement of claim and that the plaintiffs should recover against the first defendant such amount as the court might assess in respect of the plaintiffs' claim for damages, such assessment to be held before a judge. Finally, it was ordered that the first defendant pay the plaintiffs' costs of the motion and, in the event of the defence being struck out, the costs of the suit, to include the assessment of damages.

8 The first defendant failed to make discovery with the time prescribed. Therefore, the default judgment in favour of the plaintiffs against the first defendant, which has not been appealed, notwithstanding that the applicants contemplated appealing in August, 2003, stands.

9 The proceedings have continued against the defendants other than the first defendant. On 30th May, 2006 the plaintiffs' solicitors served updated particulars of damage on all of the defendants, including the first defendant. Notice of trial has been served on all of the defendants, including the first defendant. On the day notice of trial was served on the applicants, 14th July, 2006, the applicants issued this application to come off record.

The history of the application

10 This is the second motion to come off record which the applicants have brought.

11 The first motion was issued on 3rd August, 2004, returnable on 1st November, 2004. The events leading to that application commenced with fairly intensive efforts by the applicants in July, August and September, 2003 to procure the swearing of an affidavit of discovery in accordance with the order of 21st January, 2003. Those efforts were directed to Mr. John Quinn, who was a director of the first defendant, although I note that in accordance with the order of 21st January, 2003 the deponent was to be Michael Cahillane. There was no response from Mr. Quinn. As early as 7th August, 2003 the applicants were advising Mr. Quinn that the insurer had instructed them to put the first defendant on notice that it would be withdrawing indemnity due to failure to co-operate with the applicants. By 10th September, 2003 the applicants were threatening to come off record and that threat was repeated in a letter of 2nd October, 2003 and again in a letter of 28th January, 2004. The insurer and the applicants followed through on their threats, eventually. By letter dated 29th July, 2004 the applicants informed the first defendant that, as a result of its complete failure to assist the insurer in the defence of the claim, the insurer was exercising its discretion not to provide cover in relation to the claim and was repudiating the policy because of the first defendant's conduct in relation to the affidavit of discovery. Further, the applicants were going to apply to this Court to come off record.

12 That led to the first application. The first application was struck out because of the failure of the applicants, who were the moving party, to appear. The applicants put that down to a breakdown in communications between the parties. This application was not initiated until approximately twenty-one months later and the applicants accept the blame for, and do not seek to excuse, that delay.

13 In the period between the striking out of the first application and the initiation of this application the plaintiffs' solicitors, by letter dated 21st March, 2005, informed the applicants that they understood from Nolan Farrell and Goff, Solicitors, who represented Mr. Quinn and his co-director of the first...