Sfl Engineering Ltd v Smyth Cladding Systems Ltd & Korrugal Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Kelly
• Judgment Date: 09 May 1997
• Neutral Citation: [1997] IEHC 81
• Docket Number: No. 854P/1994
• Court: High Court
• Date: 09 May 1997

[1997] IEHC 81

THE HIGH COURT

No. 854P/1994

SFL ENGINEERING LTD v. SMYTH CLADDING SYSTEMS LTD & KORRUGAL LTD

BETWEEN

SFL ENGINEERING LIMITED

PLAINTIFF

AND

SMYTH CLADDING SYSTEMS LIMITED

DEFENDANT

AND

KORRUGAL LIMITED, KORRUGAL A.B., PLANNJA LIMITED AND PLANNJA A.B.

THIRD PARTIES

Citations:

RSC

CIVIL LIABILITY ACT 1961 S27

CIVIL LIABILITY ACT 1961 S27(1)(b)

RSC O.16

RSC O.16.1(iii)

RSC O.21

RSC O.16 r8(3)

BOARD OF GOVERNORS OF ST LAURENCES HOSPITAL V STAUNTON 1990 2 IR 31

DILLON V MACGABHANN UNREP MORRIS 24.7.95 1995/7/1991

CARROLL V FULFLEX INTERNATIONAL CO LTD UNREP MORRIS 18.10.95 1995/16/4181

Synopsis:

Practice and Procedure

Joinder of third parties to proceedings; delay of almost two years; whether third parties served as soon as reasonably possible under s.27(1)(b), Civil Liability Act, 1961; whether plaintiff entitled to rely on alleged oral assurance Held: Unreasonable delay in serving third parties; third party notices set aside High Court: Kelly J. 09/05/1997

SFL Engineering Ltd. v. Smyth Cladding Systems Ltd.

Mr. Justice Kelly

1 A defendant who wishes to join a person as a third party to proceedings must serve a Third Party Notice upon such person as soon as is reasonably possible.

2 The temporal obligation to which I have just referred is to be found both in the relevant statutory provisions, the Rules of the Superior Courts and the jurisprudence which has developed on this topic.

3 Section 27 subsection (1) of the Civil Liability Act,1961provides:-

"(1) A concurrent wrongdoer who is sued for damages or for contribution and wishes to make a claim for contribution under this Part -

(a) shall not, if the person from whom he proposes to claim contribution is already a party to the action, be entitled to claim contribution except by a claim made in the said action, whether before or after judgment in the action; and

(b) shall, if the said person is not already a party to the action, serve a third party notice upon such person as soon as is reasonably possible and, having served such notice, he shall not be entitled to claim contribution except under the third party procedure. If such third party notice is not served as aforesaid, the Court may in its discretion refuse to make an order for contribution against the person from whom contribution is claimed".

4 This judgment is concerned only with the circumstances outlined in Section 27(1 )(b). It is to be noted that the stricture in respect of time is limited to the situation dealt with in that subsection, namely, a claim for contribution being made against a person who is not already a party to an action.

5 Order 16 of the Rules of the Superior Courts governs third party procedure. Order 16.1(iii) provides:-

"Application for leave to issue the third party notice shall, unless otherwise ordered by the Court, be made within 28 days from the time limited for delivering the defence or, where the application is made by the defendant to a counterclaim, the reply".

6 This provision of the Rules of the Superior Courts gives expression in a concrete form to the temporal imperative contained in Section 27(1)(b) of the 1961 Act. It is to be noted that the Rules of Court require the application to be made not within 28 days from thedelivery of the defence in the proceedings but within 28 days from thetime limited for delivering the defence. That time is fixed by Order 21 of the Rules of the Superior Courts. In a case where a defendant does not by notice require a Statement of Claim, the defence must be delivered within 28 days from the entry of appearance. In any other case it must be delivered within 28 days of the date of delivery of the Statement of Claim or from the time limited for appearance, whichever shall be later. It is clear, therefore, that the Rules of Court contemplate an application for the joinder of a third party being made at quite an early stage in the proceedings.

7 Under Order 16 Rule 8(3) third party proceedings may at any time be set aside by the Court. It is this jurisdiction which is invoked on this application.

8 InThe Board of Governors of St. Laurence's Hospital v. Staunton [1990] 2 I.R. 31 the Supreme Court considered the proper construction to be given to Section 27(1) of the Civil Liability Act, 1961. The facts in that case were as follows. In July 1981 the plaintiff whilst a patient in the defendant's hospital fell from a window and was injured. In September 1983 he commenced proceedings against the hospital as a sole defendant alleging that his injuries were due to the negligence of the hospital, its servants or agents. In November 1983 the Statement of Claim was delivered in the action. Particulars were sought and were eventually delivered in July 1984. The defence to the proceedings was delivered on the 8th November, 1984 and it disputed both liability and damages. The action was set down in 1985. It was tried before a judge and jury in July 1987. The plaintiff obtained judgment for £90,000 damages against the defendants. The defendants appealed and the plaintiff cross-appealed. After the service of the notices of appeal and cross-appeal, the defendants served a notice of motion together with a third party notice on the third party who was the consultant under whose care the plaintiff had been admitted to the hospital. That was served in November 1987. The third party had been called by the defendants as a witness at the hearing of the plaintiff's action but there was no evidence that any claim had been made formally or informally against him by the defendants prior to the service of the notice of motion and the third party notice in November 1987. The Supreme Court upheld the decree which had been granted to the plaintiff in the High Court.

9 The third party appealed against the order made in the High Court in November 1987 adding him as a third party to the proceedings.

10 In the course of his judgment, Finlay C.J. expressed his view as to the true meaning of the first sentence in Section 27(1)(b) of the 1961 Act. He said:-

"I am quite satisfied upon the true construction of that subsection that the only service of a third party notice contemplated by it and, therefore, the only right of a person to obtain from the High Court liberty to serve a third party notice claiming contribution against a person who is not already a party to the action, is a right to serve a third party notice as soon as is reasonably possible. A defendant in an action seeking to claim contribution against a person who is not a party to the proceedings cannot serve any third party notice at any other time, other than as soon as is reasonably possible.

In my view, the application brought after the conclusion of the action by the plaintiff against the defendants for liberty to serve a third party notice could not, under any circumstances, be construed as an application to serve a third party notice as soon as was reasonably possible. It is clear from the facts which I have outlined that probably from the month of July, 1984, when particulars were filed, the defendants were aware of the nature of the claim which was being brought against them by the plaintiff. They may have been unaware as to whether that claim would succeed or not, but they were aware of what the nature of the claim was, and it must follow, it seems to me, that they were also aware at that time of any potential claim for contribution they might have against this third party.

In these circumstances, serving a third party notice on the third party after the conclusion of the plaintiff's claim is not serving it as soon as is reasonably possible.

In these circumstances, I take the view that the learned High Court judge was in error in giving liberty for the service of a third party notice pursuant to Order 16, Rule 1 of the Rules of the Superior Courts, and that he should have refused this application. I would therefore allow this appeal and set aside the order of the High Court".

11 The view expressed by Finlay C.J. in this case is clearly authority for the proposition that the obligation to serve a third party notice as soon as is reasonably possible is mandatory in nature and a failure to comply with that temporal obligation may lead to the application for liberty to issue and serve the third party notice being refused or, if granted, being set aside on the application of the newly joined third party.

12 The topic was considered by Morris J. inDillon v. MacGabhann (unreported judgment 24th July, 1995). In that case he set aside a third party notice which had not been served or indeed even sought as soon as was reasonably possible. He relied upon the decision of the Supreme Court in the St. Laurence's Hospital case.

13 The same judge considered the matter again in the case ofCarroll v. Fulflex International Company Limited (unreported judgment 18th October, 1995). That again was an application to set aside the third party proceedings. On that occasion he declined to make the order but in so doing made it clear that he was not in any way departing from the principles enunciated by the Supreme Court in the St. Laurence's Hospitalcase. He declined to set aside the third party proceedings because there had been an exchange of pleadings as between the defendants and the third party and the issue as between them was actually listed for trial. He took the view that it would be entirely inappropriate that having pursued that course and with the action ready to be heard, the third party should come to Court seeking to set aside a procedure in which they had taken an active part. He held that a motion to set aside a third party notice should only be brought before significant costs and expenses had been incurred in the third party procedures. A third party who wishes to have a third party notice set aside should move as soon as is reasonably possible.

14 In considering...