Superwood Holdings Plc v Ireland

• Jurisdiction: Ireland
• Judge: Mr. Justice Murphy,Mr. Justice Quirke
• Judgment Date: 26 April 2006
• Neutral Citation: [2006] IEHC 123,[2005] IEHC 232
• Court: High Court
• Docket Number: [2004 No. 45P]
• Date: 26 April 2006

[2005] IEHC 232

THE HIGH COURT

No. 45 P/2004

SUPERWOOD HOLDINGS PLC v IRELAND

BETWEEN/

SUPERWOOD HOLDINGS PLC, SUPERWOOD LIMITED, SUPERWOOD EXPORTS LIMITED, SUPERWOOD INTERNATIONAL LIMITED, SUPERCHIP LIMITED AND SUPERWOOD (U.K.) LIMITED

PLAINTIFFS

AND

IRELAND AND THE ATTORNEY GENERAL

DEFENDANTS

RSC O.19 r28

COMPANIES ACT 1963 S390

EUROPEAN CONVENTION ON HUMAN RIGHTS & FUNDAMENTAL FREEDOMS ART 6(1)

EUROPEAN CONVENTION ON HUMAN RIGHTS & FUNDAMENTAL FREEDOMS 1ST PROTOCOL PARA 1

EUROPEAN CONVENTION ON HUMAN RIGHTS & FUNDAMENTAL FREEDOMS ART 14

CIVIL LIABILITY ACT 1961 S17(2)

DERMOT PEPPARD & CO LTD & SMYTH v BOGOFF & ORS 1962 IR 180

SEE CO LTD (T/A SOUTH EAST ELECTRIC CO) v PUBLIC LIGHTING SERVICES LTD & PETIT JEAN (UK) LTD 1987 ILRM 255 1986/4/1452

RSC O.27 r8

RSC O.27 r9

MILOSLAVSKY v UNITED KINGDOM 1995 20 EHRR 442 1996 EMLR 152

MCATEER & BEECHFINCH LTD v LISMORE (NO 2) 2000 NI CHD 477

KAVANAGH v GOVERNOR OF MOUNTJOY PRISON & ORS 2002 3 IR 97

BARRY v BUCKLEY 1981 IR 306 1981/9/1485

O'NEILL v RYAN & ORS 1993 ILRM 557 1993/5/1227

LAC MINERALS LTD v CHEVRON MINERAL CORP OF IRELAND & ORS 1995 1 ILRM 161 1994/11/3344

SUPERMACS (IRL) LTD & MCDONAGH v KATESAN (NAAS) LTD & SWEENEY 2000 4 IR 273 2001 1 ILRM 401 2000/17/6423

LAWLOR v SEAMUS ROSS MENOLLY HOMES LTD & ANOR UNREP SUPREME 22.11.2001 2001/14/3826

LISMORE HOMES LTD v BANK OF IRELAND FINANCE LTD & ORS (NO 3) 2001 3 IR 536 2002 1 ILRM 541 2001/14/3907

SALIH v GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORP LTD 1987 IR 628 1988/3/474

LOUGH NEAGH EXPLORATION LTD v MORRICE & ORS 1999 4 IR 515

CONSTITUTION ART 40

CONSTITUTION ART 34.4.3

EUROPEAN CONVENTION ON HUMAN RIGHTS ACT 2003 S6(1)

KILKELLY ECHR & IRISH LAW 2004 CHAP 8

K (D) v KING & ORS 1994 1 IR 166 1993 ILRM 710 1992/12/3761

PRACTICE AND PROCEDURE

Dismissal of proceedings

Application to dismiss claim - No reasonable cause of action disclosed -Matters argued and determined in previous action - Different defendants - Rules of the Superior Courts 1986 (SI 15/1986), O19, r28 - Claim dismissed (2004/45P - Murphy J - 5/7/2005) [2005] IEHC 232, [2005] 3 IR 398

Superwood Holdings plc v Ireland

1 Judgment of Mr. Justice Murphy delivered on the 5th day of July, 2005 .

1. Pleadings

2 2 1.1 This is an application by the defendant, Ireland and the Attorney General (the State) for an order pursuant to O. 19, r. 28 of the Rules of the Superior Courts dismissing and/or striking out the plaintiffs' (Superwood) claim and/or action against the State on the ground that the statement of claim therein discloses no reasonable cause of action against the State and/or is frivolous or vexatious.

3 In the alternative, the State seeks an order pursuant to the inherent jurisdiction of the court dismissing Superwood's claim against the State on the ground that the said claim as disclosed in the statement of claim has no reasonable prospect of success and/or is bound to fail.

4 In the further alternative, the State seeks an order pursuant to the inherent jurisdiction of the court dismissing Superwood's claim against the State on the ground that, as disclosed in the statement of claim, it is an abuse of the process of the court.

5 3 1.2 There is also an application by Superwood for an order for judgment in default of defence against the State. It is proposed to deal with the former application in the first instance.

2. Grounding Affidavit in the State's motion

6 The affidavit of John Kelly, solicitor and Assistant Principal Legal Executive in the office of the Chief State Solicitor, referred to the proceedings and to the advices of senior counsel that Superwood's claim disclosed no reasonable cause of action and had no reasonable prospect of success.

7 The plenary summons claimed a declaration that s. 390 of the Companies Act, 1963 was invalid and repugnant to the Constitution and/or was incompatible with the European Convention on Human Rights. Superwood also claimed damages, inter alia, by virtue of the fact that the said section prevented Superwood from prosecuting their appeal against the judgment of Smith J. of 4th to 7th April and 24th May, 2001, in proceedings brought by Superwood against Sun Alliance and London Insurance Plc. and Others (No. 141 of 2001) (the insurance case) for damages for having unlawfully repudiated their applications under an insurance contract for fire/consequential loss.

8 Mr. Kelly referred to the general endorsement of claim of 5th January, 2004 and the prayer in the statement of claim of the same date.

9 The statement of claim sought a declaration, inter alia, that, insofar as it was construed in Superwood's proceedings against Sun Alliance, the section was unconstitutional and was incompatible with the European Convention on Human Rights and in particular article 6(1) and paragraph 1 of the first protocol concerning the protection of property. Article 6(1) provides that everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.

10 Article 14 prohibits discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.

11 Mr. Kelly outlined the background to the proceedings arising out of a fire which occurred in Superwood's premises in October, 1987, to an initial trial before O'Hanlon J. in the High Court and Supreme Court and the second trial to determine quantum before Smith J. The original claim amounted to IR£2 million. By the time of the trial before Smith J. the claim was IR£92 million. Smith J. delivered judgment in April, 2001 and awarded two of the plaintiff companies (Superwood Limited and Superwood Exports Limited) the sum of IR£314,940.20 in damages, inclusive of interest to 19th November, 2000. Pursuant to s. 17(2) of the Civil Liability Act, 1961, Smith J. ordered that the sums so awarded be reduced by the amount of monies received by Superwood from one of the insurers by virtue of a compromise reached and concluded between Superwood and that insurer. The lodgement by Sun Alliance was ordered to be repaid.

12 The plaintiffs appealed to the Supreme Court by notice of appeal dated 14th May, 2001, detailing 336 separate grounds of appeal.

13 Sun Alliance sought an order directing Superwood to furnish security for costs pursuant to s. 390 of the Companies Act, 1963. The Supreme Court, on 12th April, 2002, (Denham J., Murphy and Murray JJ. concurring) confirmed the order of the High Court in those terms against the plaintiff. Security was determined by the Master of the High Court. The Master's order was appealed to the High Court and heard and determined by Peart J., whose order was appealed to the Supreme Court who dismissed the appeal on 17th October, 2003 (Murray J., McGuinness and Fennelly JJ. concurring).

14 The amount of security for costs was assessed at €1,592,102.56.

15 The statement of claim asserts that Superwood are not in a position to pay "this or any comparable sum" and that "the reasons why Superwood are so impecunious as not to be able to prosecute their appeal under the conditions so imposed is on account of the wrongdoing to them by Sun Alliance, defendants, viz. unlawfully repudiating an insurance contract and not paying money that should have been paid on or before March, 1989".

16 The statement of claim alleges that the Supreme Court had "held (implicitly) that it was irrelevant that the appellants' impecuniosity was the consequence of the wrongdoing of the respondents; that a major theme in the appeal was that the law was fundamentally unfair in a variety of respects and that it fell below the standards required by the Constitution and article 6(1) of the European Convention on Human Rights, and that the appeal might have a very considerable prospect of success."

17 Mr. Kelly averred that neither the judgment of Denham J. nor Murray J. supported the claim that the State "do not ... dispute these implicit findings as to the correct interpretation of s. 390 of the 1963 Act" as asserted by Superwood in para. 13 of the statement of claim.

18 The power to order for security for costs was discretionary and the onus lay to prove the existence of "special circumstances" to justify the court in exercising its discretion in favour of the plaintiff. The deponent referred to ( Peppard & Co. Ltd. v. Bogoff and S.E.E. Co. Ltd. v. Public Lighting Services Ltd. The factors identified by McCarthy J. in the latter case were considered by Denham J. who expressly recited them as factors to be considered and who pointed out the reality of the matter, specifically referring to the upward revision by Superwood of their claim for damages to IR£92 million and the lengthy and expensive hearing.

19 He said that there was no basis for the assertion that the Supreme Court, in its judgment of 12th April, 2002, had held that it was regarded as irrelevant that the appeal had either a very considerable prospect of success or an arguable prospect of success. Denham J. expressly adverted to this factor in her judgment. No issue of constitutionality was raised at an appropriate time. Superwood had turned down a very substantial lodgement, being twice that of Superwood's original claim. The first named defendant had incurred costs which were estimated at IR£5 million in defending the proceedings. The time for raising issues regarding security of costs was at the first hearing of the Supreme Court when, on 12th April, 2002, that court, having taken account of the extremely protracted nature of the litigation, came to the conclusion that, in the exercise of its discretion, it should require the plaintiff to provide security for costs.

20 Mr. Kelly referred to the two grounds...