Ryan v Kevin O'Leary (Clonmel) Ltd
| Jurisdiction | Ireland |
| Judge | Mr. Justice David Barniville |
| Judgment Date | 23 November 2018 |
| Neutral Citation | [2018] IEHC 660 |
| Docket Number | [2018 NO. 28 MCA] |
| Court | High Court |
| Date | 23 November 2018 |
[2018] IEHC 660
THE HIGH COURT
Barniville J.
[2018 NO. 28 MCA]
IN THE MATTER OF THE ARBITRATION ACT, 2010
AND IN THE MATTER OF AN APPLICATION TO SET ASIDE AN ARBITRAL AWARD PURSUANT TO ARTICLE 34 OF THE UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION
AND
AND
Arbitration – Arbitral award – Article 34(2) of the UNCITRAL Model Law on International Commercial Arbitration – Applicants seeking an order setting aside an arbitral award – Whether there was any basis on which the arbitrator’s award could be set aside under Article 34(2) of the UNCITRAL Model Law on International Commercial Arbitration
Facts: The applicants, Mr and Mrs Ryan, applied to the High Court for an order setting aside an arbitral award made in arbitration proceedings between the Ryans and the respondents, Kevin O’Leary (Clonmel) Ltd and General Motors, dated 21st December, 2017. The Ryans sought to set aside the award on the grounds set out in Articles 34(2)(a)(iii) and (iv) and Article 34(2)(b) of the UNCITRAL Model Law on International Commercial Arbitration and the Arbitration Act 2010.
Held by Barniville J that the Ryans had not persuaded him that there was any basis on which the arbitrator’s award could be set aside under Article 34(2) of the Model Law.
Barniville J held that he would refuse the Ryans’ application to set aside the award.
Application refused.
This is my judgment on an application by the applicants, Patrick Ryan and Ann Ryan (the ‘Ryans’), for an order setting aside an arbitral award made in arbitration proceedings between Mr. and Mrs. Ryan and the respondents to this application, Kevin O'Leary (Clonmel) Ltd (‘O'Learys’) and General Motors, dated 21st December, 2017 (the ‘award’). The Ryans seek to set aside the award on the grounds set out in Articles 34(2)(a)(iii) and (iv) and Article 34(2)(b) of the UNCITRAL Model Law on International Commercial Arbitration (the ‘Model Law’) and the Arbitration Act, 2010 (the ‘2010 Act’).
Unfortunately, for reasons set out in this judgment, I have concluded that the Ryans must fail in their application. In the circumstances, I must refuse their application to set aside the award. I will now explain why that is so.
Mr. Ryan is in his late 70's and Mrs. Ryan is in her late 60's. They live in Mullinahone, Co. Tipperary. In May 2013 they bought an Opel Meriva car from their local Opel dealer in Clonmel, O'Learys. O'Learys are the first named respondent to this application. General Motors are the second named respondent. The car was an ex-demonstration model from 2012 which had approximately 24,000 kilometres on the clock when it was sold to the Ryans. The Ryans paid €17,650 for the car which included a trade-in of their then car and they partly funded the balance of the purchase price with a loan from the credit union. The Ryans had almost three years of trouble-free driving with the car and put up approximately another 70,000 kilometres on the clock over that period. All that came to an end in late January 2016 when the car broke down and had to be towed to O'Learys” garage. It broke down on two further occasions in January and February 2016. On each occasion it had to be towed to O'Learys. Following the first and second breakdown, the Ryans had to replace the battery and fuel pump in the car at their expense.
There was a dispute between motor engineers engaged by the Ryans and by O'Learys as to the cause of the problem. The Ryans” motor engineer (Mr. Cottter) was of the view that there was a manufacturing defect in the car, being a problem with the wiring loom. O'Learys” engineer, Mr. Quirke, thought the problem was an overheating fuel pump caused by wear and tear over the years. The car has been off the road since February 2016 and has been stored by a relative of the Ryans (at no cost to them) since April 2016.
Attempts to resolve the issue with O'Learys and General Motors were unfortunately not successful. It was accepted by all sides that there was a fault with the car. The cause of that fault was disputed. Mr. Cotter estimated that the cost of carrying out the necessary work to get to the bottom of the problem and to repair it was approximately €5,000. On 13th April, 2016, General Motors, on its behalf and on behalf of O'Learys, offered to cover 80% of the cost of repairing the car. That offer was not accepted by the Ryans, apparently on the advice of Mr. Cotter. The Ryans were not prepared to pay any of the repair costs, believing the problem to be entirely one for O'Learys and General Motors to deal with. Ultimately, the Ryans lost all faith in the car and wished to hand it back to O'Learys and recover the purchase price as well as the additional costs they had paid out for having it towed and repaired the first couple of times it broke down.
The Ryans commenced Circuit Court proceedings against O'Learys in December 2016 in Tipperary. O'Learys” solicitors drew to the attention of the solicitors acting for the Ryans that there was an arbitration clause in the contract which the Ryans had entered into with O'Learys to purchase the car. The Ryans then agreed to stay the Circuit Court proceedings and to refer the dispute to arbitration.
O'Learys and General Motors are members of the Society of the Irish Motor Industry (SIMI). The Chartered Institute of Arbitrators – Irish branch (CIArb) has put in place an arbitration scheme on behalf of SIMI. The Ryans applied to the CIArb under that scheme for the appointment of an arbitrator to resolve their dispute with O'Learys. The President of CIArb appointed John Hussey, solicitor, as arbitrator in respect of the dispute in July 2017.
The arbitrator gave initial directions on 27th July, 2017. In his letter of that date setting out his directions, the arbitrator identified the respondents to the arbitration as O'Learys and General Motors. The arbitrator directed an exchange of pleadings in the arbitration.
The Ryans delivered a statement of claim naming O'Learys and General Motors as respondents in the arbitration. They sought relief in the arbitration against both O'Learys and General Motors. O'Learys and General Motors, as respondents in the arbitration, delivered points of defence in which they admitted that the car had developed a fault but pleaded that the fault occurred in the ordinary course of usage, three years after the car had been purchased by the Ryans. It is a matter of controversy between the parties as to whether O'Learys and General Motors raised certain issues in their points of defence on which the arbitrator subsequently relied in his award. I address that issue later in my judgment.
The hearing of the arbitration took place on 17th November, 2017 and lasted a full day. The Ryans were represented by solicitors and counsel as were O'Learys and General Motors. Mrs. Ryan and her daughter gave evidence as did Mr. Cotter, the motor engineer, on behalf of the Ryans. O'Learys” service manager gave evidence for the respondents as did Mr. Quirke, the motor engineer retained on their behalf. The witnesses called were all cross-examined by opposing counsel. Counsel had the opportunity of making submissions at the conclusion of the evidence.
The arbitrator made his award on 21st December, 2017. The award was furnished to the parties. The Ryans failed in their claims before the arbitrator for the reasons set out in the award. The arbitrator made no order in respect of costs. The arbitrator's own fees were paid by O'Learys/General Motors under the CIArb/SIMI arbitration scheme.
The Ryans now seek to set aside the award on various grounds which they contend are covered by Articles 34(2)(a)(iii) and (iv) and Article 34(2)(b) of the Model Law and the 2010 Act. O'Learys and General Motors, the respondents to the Ryans” application, resist the application and contend that the Ryans are, in effect, seeking to appeal to the High Court from the decision of the arbitrator as set out in the award. They contend that no such appeal is open to the Ryans under the Model Law or the 2010 Act.
Under O. 56, rr. 2 and 3 of the RSC, notice of an application to set aside an arbitrator's award must be given to the arbitral tribunal, albeit that the tribunal is not to be a party to the proceedings. It is not clear from the papers whether the Ryans did give notice of their application to the arbitrator, as required under those provisions of the RSC. However, in light of the fact that the respondents to the application fully stood over the procedure adopted by the arbitrator and the award itself, I am satisfied that no prejudice has been caused to the arbitrator by reason of any failure to provide notice of the application to him. I would, therefore, be prepared in this case to dispense with any requirement to give notice of the application to the arbitrator, in the event that such notice was not in fact given to him. I note that a similar approach was taken in somewhat similar circumstances by McGovern J. in O'Leary trading as O'Leary Lissarda v. Ryan [2015] IEHC 820 (‘ O'Leary Lissarda’) (para. 3, p. 2). However, this should not be the norm for applications such as this. The provisions of the RSC must be complied with. That is particularly so where (as here) the applicant in a set aside application is critical of the award and of the procedures adopted by the arbitrator.
The Ryans application was grounded on an affidavit sworn by Mrs. Ryan on 8th February, 2018. In her affidavit, Mrs. Ryan referred to the background to the dispute with O'Learys and the circumstances in which the arbitrator was appointed. Mrs. Ryan's affidavit then set out the grounds on which it was being asserted the...
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