High Court: Claim for specific performance dismissed for want of prosecution

About this case:

• Citation:
  [2024] IEHC 133
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Rory Mulcahy

Delivering judgment for the High Court, Mr Justice Rory Mulcahy stated that “where a party is seeking to enforce a compromise of earlier proceedings”, the “public policy which sees the courts encourage the settlement of disputes would be undermined if settlement agreements trigger further disputes, which are, in turn, not prosecuted with diligence”.

Background

The proceedings commenced in April 2011 seeking specific performance of a settlement agreement. The settlement agreement compromised two earlier sets of proceedings concerning an escape of water from the defendants’ premises which had damaged the plaintiffs’ premises, City Limits Comedy and Night Club in Cork.

The proceedings before the court concerned the effectiveness of the works carried out by the defendants pursuant to the settlement agreement. A full defence was delivered by the third and fourth defendants in February 2013.

The plaintiffs filed three notices of change of solicitors at various points following the issuing of the proceedings and despite the matter having been set down for trial in March 2014, issued a discovery request in August 2017 and a request for particulars in May 2022.

The third and fourth defendants applied to strike out the plaintiff’s claim for want of prosecution. The plaintiffs offered no excuse as to vast majority of the delay, except to say that “since [the December 2021] Notice of Change of Solicitor was filed, every effort has been made to progress the within matter”.

The High Court

Mr Justice Mulcahy noted at the outset that the approach that a court must take when asked to strike out a claim for delay is that as set out by the Supreme Court in Primor plc v Stokes Kennedy Crowley [1996] 2 IR 459, which the judge summarised as: “Has there been inordinate delay? If so, is the delay inexcusable? If the delay is inordinate and inexcusable, does the balance of justice favour the claim being dismissed?”

The court also considered the application of Primor in more recent cases, such as Gibbons v N6 (Construction) Ltd [2022] IECA 112 and Cave Projects Ltd v Kelly [2022] IECA 245.

Turning to the first limb of Primor, Mr Justice Mulcahy remarked that the plaintiffs did not seriously dispute that the delay was inordinate, “an appropriate concession” in light of the proceedings’ 12-year history.

The judge pointed out that that period included two periods of more than three years in which no progress at all was made in the proceedings, and that: “It is difficult to see how this could sensibly be regarded as anything other than inordinate. That would be so even if the proceedings were of some complexity, but no such complexity has been identified or is apparent here.”

The court also considered that “where a party is seeking to enforce a compromise of earlier proceedings”, the “public policy which sees the courts encourage the settlement of disputes would be undermined if settlement agreements trigger further disputes, which are, in turn, not prosecuted with diligence”.

Proceeding to the second limb of Primor, Mr Justice Mulcahy opined: “In circumstances where the plaintiffs have provided no explanation at all for the lion’s share of the delay in bringing these proceedings to trial, the delay must prima facie be regarded as inexcusable. When considered in detail, it is apparent that there have been significant periods of unexplained inactivity by the plaintiffs, which means that the delay in prosecuting the proceedings is inexcusable…”

Considering that responsibility for some of the delay rested upon the third and fourth defendants as no appearance had been entered until a year after the plenary summons issued, and although no evidence had been tendered demonstrating when the summons had been served, “as the defendants bear the onus of proof on this application, they must take responsibility for the entirety of this delay”.

Nonetheless, the court determined that “overall the delay in progressing the proceedings, and in particular, the two periods between March 2014 and August 2017, and between November 2018 and May 2022, was, in my view, unexplained and inexcusable”.

Addressing the third limb of Primor, the judge highlighted: “It is clear from the authorities that the starting point for the assessment of the balance of justice is the conclusion that the proceedings are ones in which the plaintiffs have been guilty of inordinate and inexcusable delay. It is also clear that a defendant seeking to have proceedings dismissed for delay must be able to point to some prejudice, which prejudice must arise from the delay, albeit that any prejudice relied on need not be confined to prejudice defending the proceedings.”

The court considered the defendants’ contentions concerning prejudice. The defendants asserted inter alia that had the plaintiff progressed the proceedings, they would have been entitled to rely upon indemnities provided to them by the first defendant, which they could no longer rely upon as the first defendant had since entered a personal insolvency arrangement in 2015.

The defendants also alleged that since the plaintiff had commenced at least three further sets of proceedings against other parties for loss and damage associated with water egress, the proceedings were rendered more complicated and expensive to bring to trial and to resolve.

The plaintiffs contended that the defendants couldn’t have been entitled to indemnities from the first defendant, or else they would be able to carry out the works in the settlement agreement without risk of liability. The court determined: “Whether or not that is an argument that will win the day, I do not need to decide. There was a clear benefit to the third and fourth defendants in being able to deploy that argument, as there would be a benefit to any litigant in having additional, stateable arguments when defending or prosecuting a case.”

The plaintiffs also suggested that the third and fourth defendants acquiesced in the delay, firstly by engaging in the discovery progress, and secondly by engaging in without prejudice discussions concerning a proposed joint inspection. The court noted: “Where parties agree to participate in without prejudice discussions on the basis that neither party will rely on any period of delay caused thereby, a sort of standstill agreement, it would plainly be improper to look behind that agreement and allow one party to characterise it as acquiescence…”

The court continued: “In relation to the third and fourth defendants’ participation in the discovery process, the plaintiffs point to the fact that in Primor, both High Court judgments the subject matter of that appeal had determined that participation in the discovery process had compromised the defendants’ position. However, crucially, the Supreme Court rejected these conclusions.”

Conclusion

Accordingly, the High Court dismissed the plaintiffs’ claim as against the third and fourth defendants.

Coughlan & Anor v. Stokes & Ors [2024] IEHC 133