High Court: Refusal to set aside third party proceedings on grounds of six months’ delay

About this case:

• Citation:
  [2023] IEHC 518
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Conor Dignam

Delivering judgment in the High Court, Mr Justice Conor Dignam found that the period of over six months to serve the third party notice was insufficient to set aside the third party proceedings for delay.

Mr Justice Dignam also found that the obligation to move as soon as reasonably possible applied to the third party seeking to set aside the notice as well as the defendant who served it, and a largely unexplained delay of 16 months from the service of the notice to the issuing of the application before him was alone sufficient to refuse the relief sought.

Background

The plaintiff owner of a block of apartments sued in negligence and nuisance for damage caused to its property by works undertaken by the defendants in the course of the Waterford flood relief scheme. The plaintiff alleged that the third defendant negligently used a heavy pile-driving hammer to drive steel sheet piles, which caused subsidence to the plaintiff’s property.

The statement of claim and plenary summons were delivered on 31 July 2020, and an appearance was entered by the third defendant on 17 August 2020. An application for leave to serve a third party notice was issued by that defendant on 18 December 2020, and was determined on 22 March 2021. The third party notice was served on the applicant on 23 April 2021, alleging that the applicant had carried out the pile-driving works.

On 22 August 2022, the third party issued a motion seeking to set aside the third party proceedings, alleging a failure on part of the third defendant to serve the third party notice upon it as soon as reasonably possible.

High Court

Mr Justice Dignam began by considering section 27(1)(b) of the Civil Liability Act 1961, which requires that a third party notice is served upon the proposed third party “as soon as is reasonably possible”.

Observing that Order 16, rule 1(3) of the Rules of the Superior Courts imposes a 28-day time limit in respect of applications for leave to join third parties, Mr Justice Dignam accepted that this limit does not appear in the Civil Liability Act and is merely a “benchmark” against which the requirement to move “as soon as is reasonably possible” is measured, with which parties were not normally expected to comply.

Mr Justice Dignam found that the legal position in this regard was usefully summarised by Mr Justice Garrett Simons in Ashford Castle Ltd v. E.J. Deacy Contractors & Industrial Maintenance Ltd [2021] IEHC 549 and by Mr Justice Senan Allen in Susquehanna International Group Ltd v. Execuzen Ltd [2022] IECA 209.

Following a summary of the parties’ submissions, Mr Justice Dignam considered the delay on part of the third party in seeking to set aside the third party notice, rejecting the contention on party of the third party that the relevant period should be calculated by reference to when the third party entered its appearance, and opining: “The logic of this would be to allow a third party to not enter an appearance and then to benefit from its own omission.”

Mr Justice Dignam found that in assessing whether a third party acted as soon as reasonably possible to set aside a third party notice, the time to be considered was the whole period from service of the notice. He also noted that whilst he could have regard to the failure of the third defendant to chase the third party’s appearance, any such consideration “must be” of limited weight as the obligation to enter an appearance rests upon the third party. Various reasons for its delay were proferred by the third party, which were not accepted by Mr Justice Dignam on the evidence before him.

Noting that the delay on part of the third party was alone sufficient to refuse the relief sought, Mr Justice Dignam proceeded to consider that the court had an obligation to make its own objective assessment as to whether the application for leave to serve the third party notice and service of the notice had been completed as soon as reasonably possible by the third defendant.

The third defendant submitted that in the seven-week period following the delivery of the proceedings and prior to its application to join the third party, its loss adjusters conducted investigations concerning the claim. Holding that the third defendant was entitled to conduct investigations and to obtain advice prior to its application for leave, Mr Justice Dignam said it “would seem to me to be contrary to the proper administration of justice and to the imperative that parties approach litigation with proper regard to the question of limited judicial resources and the question of costs if a defendant were obliged to join a party into proceedings before ascertaining whether there was a proper basis for doing so”.

Heeding the submissions of counsel for the third party that there was no evidence of when the third defendant informed its insurer of the claim, and that the investigation could not have advanced matters where the statement of claim contained specific rather than vague pleas, Mr Justice Dignam found that the defendant was nonetheless entitled to take reasonable time to conduct its investigations in keeping with the test espoused by Denham J. in Connolly v. Casey (Unreported, Supreme Court, 17 November 1999) and that whilst an evidential gap such as that alleged by the third party may be a determinative factor in certain circumstances, the loss adjusters’ report had been prepared in a timely manner following service of the proceedings upon the third defendant and as such, this allegation was not decisive in this case.

Finally, whilst a period of weeks did elapse between completion of the preliminary report, instructing counsel and then the issue of the motion seeking leave, Mr Justice Dignam determined that these periods taken together did not constitute a fatal delay on part of the third defendant, acknowledging the judgment of Ms Justice Mary Finlay Geoghegan in Greene v. Triangle Developments Limited & Anor [2015] IECA 249 in which she stated that: “The requirement for that application to be made – and the need to allow reasonable time to prepare the papers in my view, incorporates probably another eight to ten weeks into the period of time as a matter of reasonable practice of solicitors.”

Conclusion

Despite experiencing issues serving the third party notice as the time for doing in accordance with the order granting leave had expired, it seemed to Mr Justice Dignam that “at all stages the third-named defendant acted promptly and any slight delays in the matter after the motion was issued were outside the control of the third-named defendant” and he refused the relief sought.

Riverview Administration Owners Management CLG v. Waterford City and County Council & Ors [2023] IEHC 518