Tobin Twomey Services Ltd v Kerry Foods Ltd (No.2)

• Jurisdiction: Ireland
• Judge: Ms. Justice Laffoy
• Judgment Date: 01 January 1999
• Neutral Citation: [1998] IEHC 61
• Court: High Court
• Docket Number: No.301 Sp./1997,Defendants [1997 No.
• Date: 01 January 1999

[1998] IEHC 61

THE HIGH COURT

No.301 Sp./1997

TOBIN & TWOMEY SERVICES LTD v. KERRY FOODS LTD & SULLIVAN

IN THE MATTER OF AN ARBITRATION BETWEEN TOBIN & TWOMEY

SERVICES LIMITED, CLAIMANT AND KERRY FOODS LIMITED,

RESPONDENT

AND IN THE MATTER OF THE ARBITRATION ACTS, 1954– 1980

BETWEEN

TOBIN & TWOMEY SERVICES LIMITED

PLAINTIFF

AND

KERRY FOODS LIMITED AND TIMOTHY C. SULLIVAN

DEFENDANTS

1 Judgment of Ms. Justice Laffoy delivered on the 22nd day of April, 1998.

BACKGROUND IN OUTLINE

2 The first named Defendant, hereafter referred to as "Kerry", is a limited company incorporated in the United Kingdom which was formerly incorporated under the name W.L. Miller & Sons Limited. Kerry is a subsidiary of Kerry Group Plc., hereafter referred to as "the Plc.", a public limited company incorporated in this jurisdiction. In January 1992 Kerry entered into a contract with the Plaintiff to carry out certain electrical works at Kerry's factory at Poole. Dorset in the United Kingdom. The contract incorporated the Articles of Agreement and Conditions of Contract (1977 Edition) published by the Royal Institute of Architects of Ireland. The contract price was STG£133,418.60 or such other sum as should become payable under the contract. The works, which commenced on 6th February, 1992, were to be completed within six weeks. However, the Plaintiff, at the request of Kerry, carried out additional works in consequence of which the Plaintiff was engaged in works on the factory at Poole until November 1992.

3 Following completion of all of the works, a dispute arose between the Plaintiff and Kerry as to the amount due to the Plaintiff in respect of the works. That dispute was not resolved and eventually the Plaintiff and Kerry agreed to the appointment of the second named Defendant, hereafter referred to as "the Arbitrator", of the firm of Dermot C. Coyle & Partners, Chartered Engineers, to arbitrate on the dispute. The Arbitrator accepted the appointment and in August 1994 an Arbitrator's Appointment Form, hereafter referred to as the "Appointment Form" which dealt, inter alia, with the remuneration of the Arbitrator, was executed on behalf of the parties to the arbitration.

4 The Arbitrator held a preliminary meeting on 30th August. 1994 and subsequently issued directions in relation to pleadings, discovery and such like. A procedural meeting was held on 20th February, 1995. The arbitration commenced on 22nd May, 1995.

5 At the outset an issue arose as to whether the contract which had been executed in January 1992, which will be referred to hereafter as "the electrical services contract", covered the additional works or whether the additional works were subject to separate contracts. After four days argument as to how the matter should proceed, it was agreed that the Arbitrator should hear a preliminary issue to determine the scope of the electrical services contract. The hearing of the preliminary issue, at which evidence was led by each party, lasted for seven days from 26th May, 1995 to 9th June, 1995. The Arbitrator gave his decision on the preliminary issue in an interim award dated 14th June, 1995 (the Interim Award) in which he found that four categories of work did not form part of the electrical services contract and that each category was the subject of a separate contract, the categories being:-

6 (i) the manufacture and supply of certain designated panels,

7 (ii) the supply and installation of a transformer.

8 (iii) work done and spares supplied at the request of Mr. M. Cruz, and

9 (iv) works carried out in the bonded cold store area and in the dispatch area and the dock levellers.

10 The Arbitrator went on to direct that these works be excluded from the reference.

11 While the parties were awaiting the making and publication of the Interim Award the arbitration had continued on 13th June, 1995 on the substantive dispute between the parties arising from the electrical services contract only and continued after the publication of the Interim Award. Between 13th June, 1995 and 18th July, 1995 there were sixteen hearing days during which Mr. James Tobin, the managing director of the Plaintiff, was testifying. On 20th July, 1995 the Plaintiff issued a plenary summons in this Court in a matter entitled "Tobin & Twomey Services Limited -v- Kerry Foods Limited and Kerry Group Plc." (Record No. 1995 No. 5698P) in which the main reliefs claimed by the Plaintiff were as follows:-

12 (a) An Order under Section 39 of the Arbitration Act, 1954(the Act of 1954) that the agreement to submit the dispute to the Arbitrator should cease to have effect or alternatively, an Order giving leave to revoke the authority of the Arbitrator.

13 (b) In the alternative, an Order under Section 36 of the Act of 1954 remitting to the reconsideration of the Arbitrator the matters referred to: and

14 (c) A Mareva injunction.

15 Contemporaneously, the Plaintiff issued a notice of motion seeking interlocutory orders to the same effect as the relief sought on the plenary summons.

16 On 21st July, 1995 the Arbitrator refused to accede to an application made on behalf of the Plaintiff that the arbitration be adjourned pending the outcome of the proceedings in this Court. The cross-examination of Mr. Tobin continued on 21st July, 1995 and for a further three hearing days until 27th July, 1995, when the arbitration was adjourned pending the outcome of the proceedings in this Court. At that stage there had been thirty-one hearing days.

17 On 6th October, 1995, Carroll J. delivered judgment in this Court on the Plaintiff's motion, refusing all the reliefs sought. The Plaintiff appealed against that decision to the Supreme Court, but the appeal was confined to two issues, namely, the refusal of an order under Section 36 of the Act of 1954 and the refusal to grant a Mareva injunction. The judgment of the Supreme Court, which is reported as Tobin & Twomey Services Limited -v- Kerry Foods Limited, (1996) 2 I.L.R.M. 1, was delivered on 6th March, 1996 by Blayney J.. In his judgment, to which I will refer in greater detail later, Blayney J. held that there was an error patent on the face of the Interim Award - the error made by the Arbitrator in concluding that, because the additional works did not form part of the subject matter of the electrical services contract, the dispute in regard to them had not been referred to him for decision - and that the matter should be remitted to the Arbitrator to be dealt with in accordance with the findings set out in his judgment. The Plaintiff's appeal against the refusal of a Mareva injunction was dismissed. That judgment was followed by an Order of the Supreme Court made on 11th March, 1996, in which it was ordered that the appeal be allowed insofar as it related to the arbitration issue and that the matter be remitted to the Arbitrator to be dealt with in accordance with the judgment of the Court. The order of the High Court in respect of the costs thereof, which awarded costs to Kerry and the Plc. against the Plaintiff, was affirmed and the Plaintiff was awarded its costs of the appeal against Kerry and the Plc.

18 Following the judgment and order of the Supreme Court, on 27th May, 1996 the Arbitrator made and published an amended interim award (the Amended Interim Award) in which he repeated his findings that the four categories of work itemised in the Interim Award did not form part of the electrical services contract. However, he went on to find that the whole of the works were within his jurisdiction.

19 I propose outlining in detail later in this judgment what transpired between the parties to the arbitration, and the parties, on the one hand, and the Arbitrator, on the other hand subsequently. For the purpose of this outline suffice it to say that the Arbitrator did not meet with the legal advisors of the parties until February 1997, when two procedural meetings were held, on 7th February and 25th February respectively. The outcome of those meetings was that it was agreed that the arbitration would resume on 7th April, 1997, at which time Counsel for the Plaintiff would be permitted to present an application that Kerry pay the Plaintiff's costs of the first eleven days of the arbitration, that is to say, up to the conclusion of the hearing of the preliminary issue. It was anticipated that this application and Kerry's response to it would take over a day and it was envisaged that the hearing of the substantive claims (the Plaintiff's claim and Kerry's counterclaim) in the arbitration would be resumed on 14th April, 1997. On 7th April, 1997 the Plaintiff sought an indefinite adjournment of the arbitration on grounds which I will outline later. The matter was adjourned until 14th April, 1997. Three further adjournments were granted at the behest of the Plaintiff, in circumstances which I will outline later: from 14th April, 1997 to 12th May, 1997, from 12th May, 1997 to 16th June, 1997; and from 16th June, 1997 to 7th July, 1997. On 7th July, 1997, in circumstances which I will outline in detail later, the Plaintiff withdrew from the arbitration. On 18th July, 1997 these proceedings were initiated by special summons.

20 In the intervening period between the order of the Supreme Court of 11th March, 1996 and the Plaintiff's withdrawal from the arbitration on 7th July, 1997, this Court's jurisdiction was invoked in two separate sets of proceedings initiated by the Plaintiff. The ultimate source of the dispute which gave rise to those proceedings was the provision which was made as to costs in the order of the Supreme Court of 11th March, 1997. Following the making of that order, Kerry and the Plc. set about having their High Court costs taxed. On the taxation before the Taxing Master it was conceded by Kerry and the Plc. that their liability to the Plaintiff for the costs of the appeal should be dealt with by way of deduction or...