Murnaghan v Markland Holdings Ltd and Another

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 10 August 2007
• Neutral Citation: [2007] IEHC 255
• Court: High Court
• Date: 10 August 2007

[2007] IEHC 255

THE HIGH COURT

RECORD NO. 2003/6781 P

MURNAGHAN v MARKLAND HOLDINGS LTD & ORS

BETWEEN/

DENIS MURNAGHAN

PLAINTIFF

AND

MARKLAND HOLDINGS LIMITED

FIRST NAMED DEFENDANT/

CLAIMANT

AND

CANTIER CONSTRUCTION LIMITED (IN VOLUNTARY LIQIDATION)

SECOND NAMED DEFENDANT/

FIRST NAMED RESPONDENT

AND

N. McELROY ASSOCIATES LIMITED TRADING AS McELROY ASSOCIATES CONSULTING ENGINGEERS

THIRD PARTY/

SECOND RESPONDENT

RSC O.16 r1(3)

ST LAURENCES HOSPITAL v STAUNTON 1990 2 IR 31

CIVIL LIABILITY ACT 1961 S27(1)(b)

MOLLOY v DUBLIN CORPORATION & ORS 2001 4 IR 52 2002 2 ILRM 22

CONNOLLY v CASEY 2000 1 IR 345

DELANY & MCGRATH CIVIL PROCEDURE IN THE SUPERIOR COURTS 2ED 2005 PARA 9.18

DELANY & MCGRATH CIVIL PROCEDURE IN THE SUPERIOR COURTS 2ED 2005 PARA 9.19

WARD v O'CALLAGHAN & ORS UNREP MORRIS 2.2.1998 1998/33/13026

SFL ENGINEERING LTD v SMYTH CLADDING SYSTEMS UNREP KELLY 9.5.1997 1998/10/2952

COOKE v CRONIN & NEARY UNREP SUPREME 14.7.1999 1999/5/1117

PRACTICE AND PROCEDURE

Third party procedure

Set aside - Delay - Whether third party notice served as soon as reasonably possible - Professional negligence - Onus of proof - Relevance of prejudice - Multiplicity of actions -- Governors of St Laurence's Hospital v Staunton [1990] 2 IR 31; Molloy v Dublin Corporation [2001] 4 IR 52; Connolly v Casey [2000] 1 IR 345; Ward v O'Callaghan (Unrep, Morris P, 25/2/1998) and SFL Engineering Ltd v Smyth Cladding Systems Ltd (Unrep, Kelly J, 9/5/1997) considered - Civil Liability Act 1961 (No 41), s 27(1)(b) - Rules of the Superior Courts 1986 (SI 15/1986), O 16, r 1(3) - Proceedings set aside (2003/6781P - Laffoy J - 10/8/2007) [2007] IEHC 255

Murnaghan v Markland Holdings Ltd

The third party sought to set aside the third-party proceedings on the grounds that the third-party notice was not served as soon as was reasonably possible.

Held by Laffoy J. in setting aside the third-party proceedings that the third-party notice was not served as soon as reasonably possible.

Reporter: R.W

1 Judgment of Miss Justice Laffoy delivered on 10th August, 2007.

The application

2 By order of this Court made on 31st March, 2006 it was ordered that the third party (McElroy) be joined as a third party in these proceedings on the basis that it would be joined with the second named defendant (Cantier) as co-defendant in the claim for contribution and indemnity of the first defendant (Markland) in these proceedings. On this application McElroy seeks to set aside the third-party proceedings.

Factual and procedural background

3 In these proceedings, which were initiated by plenary summons which issued on 5th June, 2003, the plaintiff sought damages for loss he had incurred as a result of damage to his residence at 5 Pembroke Place, Dublin 2, caused by the construction of a building on an adjoining site at No. 70 Leeson Close, Dublin 2. Markland was the owner and developer of the site at No. 70. Cantier was the building contractor retained by Markland to construct the building. McElroy was retained by Markland as structural engineers to advise on the construction of the building.

4 On the day on which the plenary summons was issued, the plaintiff applied for and obtained an interim injunction restraining the defendants from carrying out any further works on No. 70. The subsequent application for an interlocutory injunction in the same terms was vigorously defended by Markland. Eventually, agreement was reached on 25th July, 2003 between the plaintiff and Markland, which resulted in the plaintiff's motion for an interlocutory injunction being struck out. An important element of that agreement was that Markland agreed to facilitate a joint inspection by the engineers of the plaintiff and Markland of the foundations of both buildings. The parties also agreed a timetable for the procedural aspects of the proceedings with a view to securing an early trial, in accordance with which Markland's defence was delivered on 9th September, 2003.

5 The inspection of the foundations took place between 11th and 15th September, 2003. The reports of McElroy put before the court by it on this application disclose that it informed Markland on 18th September, 2003 that it was common case between Markland's advisers, including McElroy, and the plaintiff's engineer and architect that they were unable to observe a point where the foundations of No. 70 separated from the foundations of No. 5. In a fuller report of November, 2003 McElroy advised Markland, as a result of a further inspection from the No. 5 side, that there was contact between No. 5 and No. 70 at foundation level which was contrary to what was originally intended and that there was no evidence of a compressible board (Korpak) between the two foundations, as McElroy had detailed.

6 In the substantive proceedings the plaintiff claimed damages against Markland for breach of an agreement between the respective architects of Markland and the plaintiff on their principals' behalf to maintain a gap of between 100 mm and 150 mm between No. 5 and the building on No. 70, and for negligence and breach of duty, and for trespass and nuisance. The claim against Cantier was for damages for loss occasioned by its negligence, breach of duty, trespass and nuisance.

7 The voluntary winding up of Cantier commenced on 3rd July, 2003. Thereafter, until May, 2004, Cantier did not participate in the proceedings. On 15th December, 2004 the plaintiff obtained judgment in default of defence against Cantier and the damages to which the plaintiff was entitled were directed to be assessed. Subsequently, on 6th May, 2004 Cantier, on disclosure to the court that it was defending through an indemnifier, was given liberty to deliver a defence. In its defence, which was delivered on 10th May, 2004, the second defendant denied that the plaintiff had suffered any loss and pleaded contributory negligence on his part in failing to minimise his loss.

8 The trial of the plaintiff's action commenced on 19th October, 2004. As regards the position of the defendants inter se, on 28th August, 2003 Markland had served notice claiming indemnity or contribution on Cantier and on 12th May, 2004 Cantier had served notice claiming indemnity or contribution on Markland. At the hearing of the action the court was told that it had been agreed by the parties that the issues between the defendants should be left in abeyance until the issues between the plaintiff and the defendants were determined. Judgment was delivered on the plaintiff's claim on 1st December, 2004. Because of the judgment in default of defence, the liability of Cantier was not at issue. In relation to liability on the part of Markland, it was held that Markland had failed to observe good building practice in installing the foundation of No. 70 and thereby breached the duty of care it owed to the plaintiff as the adjoining property owner. It was also held that the agreement between the architects as to the maintenance of a gap between the two buildings had not been implemented. Having addressed the issue as to damage caused to No. 5 by those breaches, the court awarded the plaintiff damages in the sum of €238,909.90.

9 At the hearing of the action one witness only was called on behalf of Markland on the issue of liability, John Moylan of Moylan Consulting Engineers and Project Managers, who was retained in February, 2004 in connection with the proceedings, if not earlier. According to the evidence now put before the court by Markland, Markland continued to rely on the advices of McElroy in relation to the merits of its case generally and McElroy personnel remained witnesses in the case, which I assume means potential witnesses given that no member of the firm was called, and attended consultations, provided reports and generally assisted in addressing the factual and technical issues which arose in the case.

10 The award of damages to the plaintiff has not been appealed by Markland. However, a subsequent judgment of the court, which was delivered on 20th December, 2004, awarding costs to the plaintiff, which was the subject of a perfected order of 15th March, 2005, has been appealed.

11 Following the judgments of the court on the plaintiff's claim, on 19th January, 2005 the solicitors for Markland wrote to McElroy putting them on notice of certain facts, including that, should the insurers of Cantier fail to admit liability in full, members of McElroy who would have been involved in the case would be essential witnesses to make the case that Cantier was entirely responsible for the damage which occurred and to rebut whatever allegations of default on the part of Markland's professional advisers might be made by Cantier. It was stated that Markland was "an innocent party" in the whole affair and that it was Markland's belief that no finding of liability could be made against it unless the court made a finding that there was default on the part of Markland's professional advisers, which contributed to the damage to No. 5. McElroy was notified that, in the event of the High Court determining that there had been any default or failure on the part of Markland's professional advisers which created a liability on the part of Markland, Markland would require the relevant professional advisers or their insurers to bear the costs of discharging such liability in full, including all the costs of Markland and all other parties involved in the proceedings to the extent that they might not be discharged by Cantier. It was suggested that, if McElroy had not already done so, it should notify its insurers of the letter. The response of McElroy in a letter dated 26th January, 2005 was a statement of firm belief that McElroy had no liability in the case arising from its services on the project.

12 The proceedings on the reciprocal...