Mitchell v Mulvey Developments Ltd and Others
| Jurisdiction | Ireland |
| Judge | Mr. Justice Hogan |
| Judgment Date | 20 December 2012 |
| Neutral Citation | [2012] IEHC 561 |
| Docket Number | [2009 No. 4373 P] |
| Court | High Court |
| Date | 20 December 2012 |
AND
[2012] IEHC 561
THE HIGH COURT
ARBITRATION LAW
Procedure
Issuing of proceedings - Estoppel - Engagement in proceedings by defendant - Subsequent invocation of arbitration clause - Whether defendant estopped by conduct from relying on arbitration clause - Whether seeking statement of claim constituted engagement in proceedings - Whether change of title of Minister of State rendered contractual clause inoperative - Contract - Interpretation - Change of name - Change of title of Minister of State - Furey v Lurgan-ville Construction Co Ltd [2012] IESC 38 (Unrep, SC, 21/6/2012) considered - Arbitration Act 2010 (No 1), s 6 - United Nations Commission on International Trade Law Model Law on International Commercial Litigation, 1985 - Environment, Heritage and Local Government (Alteration of Name of Department and Title of Minister) Order 2011 (SI 193/2011) - Ministers and Secretaries Act 1924 (No 16), ss 1 and 2 - Ministers and Secretaries (Amendment) Act 1939 (No 36), s 6 - Stay refused (2009/4373P - Hogan J - 20/12/2012) [2012] IEHC 561
Mitchell v Mulvey Developments Ltd
Facts: The case concerned an application by the defendants to stay proceedings which concerned an agreement for the sale of a defective property under s.6 Arbitration Act 2010. The plaintiff denied the validity of the arbitration clause contained in the agreement with the defendants. The plaintiff"s claim related to the change of name of a state department contained in the agreement, which was suggested to render the clause inapplicable, and that the defendant would therefore be estopped from relying on the arbitration clause on the grounds of delay.
Hogan J held that as a matter of principle the arbitration clause remained fully effective; the change of name of a government department included in the agreement would have no bearing. The delay by the defendant was held to be unsatisfactory, it appeared that the case would be contested upon its merits, leading the plaintiffs to act upon that assumption, Furey v. Lurgan-ville Construction Co. Ltd. [2012] IESC 38 considered.
The defendant"s conduct precluded it from invoking the arbitration clause. The Court therefore refused to stay proceedings under an order of s.6 Arbitration Act 2010.
ARBITRATION ACT 2010 S6
MINISTERS & SECRETARIES ACT 1924 S1(iv)
MINISTERS & SECRETARIES ACT 1924 S2
MINISTERS & SECRETARIES (AMDT) ACT 1939 S6(1)(A)
MINISTERS & SECRETARIES (AMDT) ACT 1939 S6(1)(B)
ENVIRONMENT HERITAGE & LOCAL GOVT (ALTERATION OF NAME OF DEPARTMENT & TITLE OF MINISTER) ORDER 2011 SI 193/2011 ART 4(B)
ENVIRONMENT HERITAGE & LOCAL GOVT (ALTERATION OF NAME OF DEPARTMENT & TITLE OF MINISTER) ORDER 2011 SI 193/2011 ART 4
FUREY v LURGAN-VILLE CONSTRUCTION CO LTD & ORS UNREP SUPREME 21.6.2012 2012 IESC 38
ARBITRATION ACT 1980 S5
1. Under what - if any - circumstances is a party to an arbitration clause estopped or otherwise precluded by his or her own conduct from invoking the terms of that clause? This is the principal issue which arises for determination on this application to stay proceedingspursuant to s. 6 of the Arbitration Act 2010 ("the 2010 Act"). The problem arises in the following way.
2. The plaintiffs are the owners of certain property situate at Ocean Links, Strandhill, Co. Sligo. If their contentions are correct, then the property which they purchased in 2005 was seriously defective. To this end they have sued both the developer (namely, Mulvey Developments Ltd.) and the original owners of the lands, Thomas Mulvey and Robert Mulvey, who were both also directors of the development company. The plaintiffs have also sued their architect, Stephen Garvey who is the second named defendant..
3. The sixth named defendant, the National House Building Guarantee Co. Ltd. ("Homebond") is sued pursuant to the guarantee which it gave under the "Home Bond Agreement" whereby it agreed to repair defectively constructed private dwellings in the event that one of its members defaulted on its obligation to effect such a repair.
4. It is not disputed but that the agreement contains an arbitration clause, although the plaintiffs deny the validity of that clause and maintain that it is inapplicable in the present case. They also contend - and, as we have noted, this is the essential issue for resolution on this motion - that Home Bond are estopped by its own conduct in relying on the terms of the arbitration clause contained at paragraph 6.1 of the agreement.
5. The clause itself provides in relevant part that:
"Any dispute or difference which arises between the purchaser and/or Homebond and/or the Member in connection with or arising in relating to this agreement shall be referred to arbitration and the final decision of the arbitrator to be appointed (in the absence of agreement between the parties) on the application of a party to the dispute or difference to the Chairman of Homebond for the time after consultation with the Minister for the Environment and Local Government."
6. Before considering the broader question of estoppel by conduct, it is necessary to examine the first point taken by the plaintiffs is that the clause has been rendered inoperative by reason of the change of name and title of the Minister from that of the Minister for Environment and Local Government to that of the Minister for the Environment, Community and Local Government. In my view, this point is entirely unsustainable for the following reasons.
7. Following the establishment of the State in 1922, the Oireachtas quickly acted to ensure that Government departments were placed on a proper statutory footing and did not dependent for their existence on some form of pre-existing Crown prerogative. Thus, s. l(iv) of the Ministers and Secretaries Act 1924 ("the 1924 Act") created the Department of Local Government and Public Health. Section 2 of the 1924 Act provides that Ministers of State have legal personality and enjoy perpetual succession.
8. Next, s. 6(1)(a) of the Ministers and Secretaries (Amendment) Act 1939 ("the 1939 Act") empowers the Government to alter the name of any Department of State. Section 6(1 )(b) empowers the Government to alter the title of any Minister of State. This is precisely what was done by Article 4(1 )(b) of the Environment, Heritage and Local Government (Alteration of Name of Department and Title of Minister) Order 2011 ( S.I. No. 193 of 2011) which altered the name of the Minister to that of the Minister for the Environment. Community and Local Government.
9. It is true that Article 4 is prefaced by the words "in any enactment or any instrument made under an enactment" and it is said that this change is effective only for statutes and statutory instruments and does not apply to private contractual agreements such as the one at issue here. This, however, is to miss the point so far as the contract is concerned. By virtue of s. 2 of the 1924 Act the Minister is a corporation sole and enjoys perpetual succession. Allthat has changed is simply a matter of nomenclature: the Minister - irrespective of his or her styling as Minister for Environment and Local Government (as formerly) or Minister for the Environment, Heritage and Local Government (as presently) - remains the same Minister. It follows that the same legal entity remains as a party to the contract and all that has happened is that the Minister has suffered a name change.
10. It follows, therefore, that the arbitration clause is fully effective as a matter of principle. It remains now to consider whether Homebond are estopped by its conduct from exercising their rights under that clause.
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