Smyth v Tunney

• Jurisdiction: Ireland
• Judge: O'Sullivan J.
• Judgment Date: 29 January 2004
• Neutral Citation: 2004 WJSC-HC 10815
• Court: High Court
• Date: 29 January 2004

2004 WJSC-HC 10815

THE HIGH COURT

[No. 2739 P/1996]

SMYTH v. TUNNEY, DEVINE & CROFTER PROPERTIES LTD

BETWEEN

PAUL SMYTH

PLAINTIFF

AND

HUGH TUNNEY, CAROLINE DEVINE AND CROFTER PROPERTIES LIMITED

DEFENDANTS

Citations:

RSC O. 26

KROPS V IRISH FORESTRY BOARD LTD 1995 2 IR 113

STATUTE OF LIMITATIONS ACT 1957

WELDON V NEAL 1887 19 QB 394

BRICKFIELD PROPERTIES LTD V NEWTON 1971 3 AER 328

CHATSWORTH INVESTMENT LTD V CUSSINS (CONTRACTORS) LTD 1969 1 WLR 1

AER RIANTA INTERNATIONAL CPT V WALSH WESTERN INTERNATIONAL LTD 1997 2 ILRM 45

RSC O.26

RSC O.15 r13

ROUSSEL V FARCHEPRO LTD 1999 3 IR 567

MCFADDEN V DUNDALK & DOWDALLSHILL COURSING CLUB LTD UNREP SUPREME 22.4.1994 1998/25/9762

GALVIN V GRAHAM-TWOMEY 1994 2 ILRM 315

ADAM V INSURANCE CORPORATION OF BRITISH COLUMBIA 1985 66 BCLR 164

PACIFIC CENTRE LTD V MICROBASE DEVELOPMENT CORPORATION UNREP HINDS 19.9.1990 (CA)(UK)

ROUSSEL V FARCHEPO LTD 1999 3 IR 567

PASSARINI V MARTIN 1925 2 DLR 914

Synopsis:

- [2004] 1 ILRM 464

The plaintiff and his brother were directors of a company they had a controlling interest in a lease of a hotel premises from the defendants. A dispute arose over the payment of rent which the defendants sought to recover and there was a counterclaim by the lessees over allegations that the defendants were involved in making defamatory phonecalls concerning the lessees. Subsequently substantial damages were awarded by the High Court to the lessees. During the on-going litigation that had arisen the plaintiff had issued a notice of discontinuance as against the third-named defendant. However owing to a ruling issued by the Supreme Court regarding the actions of the third-named defendant the plaintiff now sought to withdraw his notice of discontinuance and deliver an amended statement of claim. It was submitted that due to the emergence of new facts it was also appropriate to allow the amended statement of claim.

Held by O’Sullivan J in allowing the application. Not to allow the notice of discontinuance to be withdrawn would be closer to punishing the plaintiff rather than ensuring that the real issues between the parties be dealt with at trial. The decision of the Supreme Court on the plaintiff’s brother’s counterclaim was clearly highly relevant and something which the court should take into account. The balance of justice was in favour of allowing the notice of discontinuance to be withdrawn. In addition it was appropriate to allow an amended statement of claim to be delivered.

Reporter: R.F.

1 O'Sullivan J. delivered 29th January, 2004.

The Parties

2 The plaintiff is a retired Chief Superintendent of An Garda Síochána and at all relevant times was, together with his brother Philip Smyth, director of Princeton Limited (of which company Philip Smyth is the majority shareholder) which company was the parent company of Genport Limited. Genport Limited occupied premises known as Sachs Hotel, Morehampton Road, Dublin 4, under a lease from the third named defendant from "the mid 1980's" (as stated in the affidavit herein of the first defendant). The said Philip Smyth is the majority and controlling shareholder of Genport Limited and the first defendant is the majority and controlling shareholder in the third defendant. The second defendant was at all material times a director and/or officer of the third defendant, with responsibility for day to day management of its affairs and was, on occasion, secretary thereof. She was also personal assistant to the first defendant and managed and looked after a wide variety of his business and personal affairs.

Background

3 From early on in the business relationship between Genport Limited and the third defendant, difficulties and differences began to emerge and it seems that these became personalised between the said Philip Smyth and the first defendant and indeed between the first defendant and the plaintiff. This present suit and the motions with which I am now dealing, form part of a protracted and complex series of litigation between Genport Limited and the third defendant and on occasion, the first and second defendants also. It is appropriate that I now refer briefly to the following salient features of this litigation.

4 The business differences already referred to culminated in an ejectment action by the third named defendant against Genport Limited, which was met in turn by a counterclaim by that company. The counterclaim was dismissed as was the ejection action in 1995.

5 For the two years preceding this, Genport Limited had ceased paying rent, apparently because the plaintiff's brother, Philip Smyth, became aware in mid 1993 of telephone calls made by the second defendant to the South East Regional Crime Squad of the Metropolitan Police in England, which were allegedly defamatory of his said brother, Philip Smyth. In these phone calls a female caller, the second named defendant, alleged that his brother was involved in money laundering on behalf of the IRA, through an Irish company called Princeton Limited, of which the plaintiff is a director. The phone caller claimed that a co-director of this company was a Chief Superintendent of An Garda Síochána who actively inhibited enquiries about his brother's criminal associates by misuse of authority whilst head of personnel in An Garda Síochána. There was an investigation by An Garda Síochána and the plaintiff was cleared.

6 Following dismissal of its proceedings for ejectment, the third defendant initiated proceedings in 1989 for possession of Sachs Hotel on the basis of nonpayment of rent. This case was met by a counterclaim on behalf of Genport Limited for damages for defamation arising out of the foregoing circumstances. They came on before Mr. Justice McCracken and were heard in April of 1996. The claim for rent was effectively conceded and the litigation dealt primarily with the counterclaim. In the course of this action the second defendant swore that she did not make the phone calls but McCracken J. held that, despite her sworn testimony, he had no doubt that she did. He further held that she made the phone calls on her own behalf but not on behalf of the third defendant. That issue was appealed and the Supreme Court held that the phone calls were made also on behalf of the third defendant, in its judgment of the 9 ^th July, 2002. The matter was sent back for the assessment of damages which was done by McCracken J. in a judgment of the 8 ^th November, 2002. Substantial damages (£50,000) were awarded for defamation and a large sum was also awarded for exemplary damages (£250,000).

7 The initial proceedings in the High Court were protracted because Genport Limited, in the course of the action, sought letters rogatory compelling the attendance of two police officers from the South Eastern Regional Crime Squad in England. The trial was adjourned pending this element which involved extensive delays and ultimately a sitting by McCracken J. in London, sitting as a Commissioner, when evidence was taken from these police officers. From this evidence it emerged that the phone calls had commenced not in 1993 as had been pleaded but in June, 1992. Following this evidence an application was made to amend the pleadings which was unsuccessful in the High Court but succeeded in the Supreme Court. Accordingly, Genport Limited's counterclaim was ultimately amended so as to plead the making of allegedly defamatory phone calls from June, 1992 until 1995.

8 Meanwhile, the plaintiff initiated the present proceedings on the 26 ^th March, 1996, although a statement of claim was not delivered until September, 1998. The plaintiff says that he became aware that the second defendant also, in all probability, telephoned similar allegations to Phoenix Magazine and also to the Revenue Commissioners. This information came to his attention as a result of records furnished to Genport Limited, pursuant to an order for discovery made in the case in which the defamation counterclaim referred to above was being made. Interrogatories were delivered to the second defendant in that case and replied to on the 16 ^th January, 2002.

9 The instant proceedings were discontinued by the plaintiff against the third defendant on the 11 ^thAugust, 1998, that is before the first statement of claim was delivered and before the Supreme Court had held (in July, 2002) that the third defendant was responsible also for the alleged defamatory phone calls made by the second defendant in the Genport proceedings. The reason given for the discontinuance was that it seemed to the plaintiff at that time unnecessary to involve the third defendant in order to vindicate his reputation and he was not minded to assume the burden of establishing that the phone calls were made also on behalf of the third defendant with the associated extra risk of costs.

The Present Motion

10 In this motion the plaintiff now seeks to withdraw his notice of discontinuance against the third defendant and also seeks to deliver an amended statement of claim incorporating, to put it briefly, further allegations against all three defendants to the effect that the second defendant made telephone calls, not only to the English police as aforesaid, but also to Phoenix Magazine and to the Irish Revenue Commissioners.

11 In moving the application, Mr. Simons B.L., counsel for the plaintiff, emphasised that while new facts, setting up the phone calls allegedly made to Phoenix Magazine and the Revenue Commissioners, were pleaded as were also new causes of action (wrongful interference with the economic interests of the plaintiff and negligence and breach of duty), these were so closely involved with the facts and cause of action already pleaded that it was appropriate to permit the amendment. With regard to the withdrawal of the notice of discontinuance, he pointed to a distinction in O. 26 of the Rules of the Superior Courts...