Tesco Ireland Ltd v McNeill and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Barrett
• Judgment Date: 25 July 2014
• Neutral Citation: [2014] IEHC 367
• Docket Number: [2002 No.13249 P]
• Court: High Court
• Date: 25 July 2014

BETWEEN

TESCO IRELAND LIMITED

PLAINTIFF

AND

THOMAS A. McNEILL, D.H. ADAMS, A.J.C. ALLEN, ALISTAIR J. GRIFFIN, ROY C. McNEILL, STEPHEN B McBRIAR, PHILIP J. McMAHON, COLIN W. REID, WESLEY McCAMLEY AND T. BROWN TRADING UNDER THE STYLE AND TITLE OF WDR AND RT TAGGART

DEFENDANT

[2014] IEHC 367

[2002 No.13249 P]

THE HIGH COURT

Application for dismissal for want of prosecution - Order 122 of the Rules of the Superior Courts, 1986 - Claim for damages - Negligence and breach of contract - Design and construction of shopping centre - Delay - Test to be applied - Primor plc v. Stokes Kennedy Crowley [1996] 2 I.R. 459 - O'Domhnaill v. Merrick [1984] I.R. 151 - Is the delay arising inordinate? - Is the delay arising inexcusable? - Balance of justice

Facts The defendants, a firm of architects and engineers trading under the name of WDR and RT Taggart, were retained in June 1994 by a property developer partnership entitled Newbay Properties. It was engaged to provide certain professional services in relation to the development of a shopping centre. Power Supermarkets Limited, which was subsequently acquired by Tesco, agreed to become the anchor tenant of the shopping centre pursuant to a lease of 2nd December, 1994; it engaged Newbay pursuant to a development agreement of the same date. Tesco sought to rely in part on a purported collateral agreement of 4th November 1996 between Power and Taggart, whilst Taggart argued the entirety of the proceedings should be dismissed for want of prosecution. It issued a motion to dismiss in August 2013. The initial proceedings commenced in 2002; from that time no substantive step has been taken by Tesco, meaning there has been a period of inactivity of almost 11 years.

Held The question of whether a period of inactivity constitutes inordinate delay is primarily one of fact and no universal benchmark exists as to what is or is not inordinate. The delay in this case was attributable to the unanticipated deferrals in the arbitration proceedings alongside the fact that Tesco's ability to recover against Newbay the amounts awarded following the arbitration proceedings had become a matter of some uncertainty. The court recognised none of this had anything to do with Taggart. It considered the applicable authorities and concluded that there was no basis on which Tesco”s delay in these proceedings could be described as other than inexcusable. The judge applied the Primor principles. Under the Primor test even if delay is found to be inordinate and inexcusable, the court is required to consider whether the balance of justice is in favour of or against a case proceeding. The case of O'Domhnaill v. Merrick indicated the balance of justice was the determinative factor.

In this case, Tesco did not make Taggart privy to its tactical thinking as regards the conduct of the arbitration and the sequencing of the litigation and it did not keep Taggart apprised as matters proceeded. Having had regard to the various authorities and to the particular facts of the case, the judge concluded the balance of justice lay against Tesco's action being allowed to proceed.

-The court therefore ordered that the claim of Tesco Ireland Limited be struck out pursuant to o.122 of the Rules of the Superior Courts 1986 and the inherent jurisdiction of the court.

Mr. Justice Barrett

JUDGMENT of Mr. Justice Barrett delivered on the 25th day of July, 2014.

1 1. This is an application by the defendants to strike out the plaintiff”s claim (1) for want of prosecution pursuant to Order 122 of the Rules of the Superior Courts, 1986; and/or (2) pursuant to the inherent jurisdiction of the court on grounds of inordinate delay and/or inordinate and inexcusable delay in the prosecution of these proceedings.

2 Facts

3 2. Tesco's claim in these proceedings is for damages for negligence and breach of an alleged collateral agreement dated 4th November, 1996, which negligence and breach of contract are claimed to have occurred in the context of the design and construction of a shopping centre in County Monaghan during the 1990s. The defendant is a multi-disciplinary firm of architects and engineers involved in construction design and consultancy. It was retained, in June 1994, by a property developer partnership, Newbay Properties, to provide certain professional services in relation to the development of the shopping centre. Power Supermarkets Limited, which was subsequently acquired by Tesco, agreed to become the anchor tenant of the shopping centre pursuant to a lease of 2nd December, 1994; it engaged Newbay pursuant to a development agreement of the same date. Tesco seeks to rely in part on a purported collateral agreement of 4th November 1996 between Power and Taggart. It is Taggart's case that the proceedings are statute-barred insofar as negligence is concerned and that the entirety of the proceedings ought in any event to be dismissed for want of prosecution. Insofar as negligence is concerned, the complaint made by Tesco is that Taggart discharged its responsibilities negligently in failing to consider and allow for post-construction settlement. That cause of action accrued on the date upon which the design was done. The works commenced in April 1996, so the drawings would have been completed prior to that date. The instant proceedings were commenced on 15th October, 2002, out of time, it is claimed, for an action in tort but within, if just within, the limitation period applicable to claims under the collateral agreement. At the time of the issuing of the defendant's motion to dismiss in August, 2013, no substantive step in the proceedings commenced in 2002 had been taken by Tesco during a period of almost 11 years. What was Tesco doing during this period? As of June 2001, it had instituted arbitration proceedings against Newbay pursuant to an arbitration clause in the development agreement. It also instituted the instant proceedings against Taggart but, according to an affidavit sworn by a solicitor for Tesco "it would have been uneconomical to prosecute two separate actions in different fora against Newbay and [Taggart]". The same solicitor later avers in his affidavit evidence that Tesco's intention in the circumstances arising was "to prosecute the arbitration first and in the event that it succeeded in the arbitration and was in a position to recover against Newbay there would be no necessity to continue the prosecution of the proceedings against [Taggart]". Having successfully prosecuted the arbitration proceedings and obtained an award in excess of €1m in respect of the remedial works that Tesco has been required to carry out at the shopping centre, Tesco now finds that it might not be in a position to recover against Newbay. It is in these circumstances that Tesco has sought to progress the instant proceedings with renewed vigour against Taggart.

4 Some general principles applicable

5 3. There are two key lines of authority governing an application for dismissal for want of prosecution. They arise respectively from the Supreme Court decisions in Primor plc v. Stokes Kennedy Crowley [1996] 2 I.R. 459 and O'Domhnaill v. Merrick [1984] I.R. 151. In Primor, Hamilton C.J., at p. 475, summarises the principles to be applied in an application such as that now before the court. The Primor principles have since been recited with approval in a number of later cases and the court does not propose to repeat them here. In essence, the Primor case establishes a three-limb test to be applied in cases of delay: (1) is the delay inordinate? (2) is the delay inexcusable? (3) even if inordinate and inexcusable, is the balance of justice in favour of or against a case proceeding? There is suggestion in recent case-law, such as JMcH v. JM [2004] 3 I.R. 385, that the Primor case ought to be viewed as concerned with post-commencement delay only and it is true that on its facts Primor was an application to dismiss based on post-commencement delay. However, there are other cases such as Guerin v. Guerin [1993] 2 I.R. 287, which pre-date but appear consistent with Primor, in which regard has been had to the full backdrop of delay arising.

6 4. Notwithstanding any finding that delay has been inordinate and inexcusable, the third limb of the Primor test may require that a case proceed where the balance of justice favours such a result. In all cases the court must also have regard to the second line of authorities referred to at the outset of this judgment, namely those arising from the decision of the Supreme Court in O'Domhnaill v. Merrick. In that case, Henchy J. referred, at p.157, to the need:-

"to strike a balance between a plaintiff's need to carry on his or her delayed claim against a defendant and the defendant's basic right not to be subjected to a claim which he or she could not reasonably be expected to defend'.

7 The interaction and concurrent validity of both lines of authority has been approved recently by the Supreme Court in McBrearty v. North Western Health Board & Others [2010] IESC 27. Thus, having tested the proceedings by reference to the Primor principles, it falls to the court also to consider the present application specifically by reference to the standard established in O'Domhnaill. In passing, it is perhaps worth noting that both lines of authorities appear consistent with the constitutional imperative, referred to by Hogan J. in Donnellan v. Westport Textiles Limited [2011] IEHC 11 at para. 24, that the courts put an end to stale claims so as to ensure the effective administration of justice and basic fairness of procedures.

8 5. The foregoing are the leading precedents and general principles currently applicable to any proceedings concerned with dismissal for want of prosecution. The same precedents and principles appear to apply regardless of whether the application to dismiss is grounded on o.122 of the Rules...