Third party notice served months after criminal trial dismissed as not 'as soon as reasonably possible' under Civil Liability Act 1961 s.27.

THE SUPREME COURT

Record No: 182/00

Murphy J

Hardiman J

Fennelly J

Between:

Mary Molloy

Plaintiff

AND

The Right Honourable Lord Mayor Alderman And Burgesses of Dublin, Clonmel Enterprises Ltd

And Bestobell Valves Ltd

Defendants/ Appellants

And

Ashworth Frazer Ltd

Third Party/ Respondent

Judgment of Mr Justice Francis D Murphy delivered the 28th day of June, 2001.

The issue in this appeal is whether a third party notice dated the 9th day of July, 1999, and served by Clonmel Enterprises Ltd, the

above secondly named Defendant (Clonmel) on the above third party, Ashworth Frazer Ltd (Frazer) was served “as soon as is

reasonably possible” within the meaning and for the purposes of s.27 of the Civil Liability Act, 1961.

On the 14th day of December, 1994, Thomas Molloy died in a tragic accident. At the time of his death Mr Molloy was in the

employment of Clonmel. It is alleged that Clonmel had installed a water valve in an underground chamber at Lower Drumcondra Road

for Dublin Corporation (the Corporation). At the time of his death Mr Molloy in company with fellow employees of Clonmel was

investigating and attempting to open the valve when the accident occurred. It appears that the accident arose because the spindle

on the valve which was not protected by a collar shot from its casing while Mr Molloy was working on it. The valve in question was

manufactured by the thirdly named Defendants, Bestobell Valves Ltd (Bestobell) and supplied to Clonmel by Frazer.

On the 20th of May, 1996, Mary Molloy, the widow of the late Thomas Molloy instituted proceedings by way of plenary summons

claiming damages against each of the above Defendants by reason of negligence and breach of statutory duty on their behalf. The

statement of claim was delivered on the 7th of April, 1997, setting out the history of the matter as already described and furnishing

particulars of negligence which included the failure:-

“To ensure that the valve was fitted with a suitable spindle collar or other protective restraint so as to ensure that it was

incapable of being ejected with force from the body of the valve.”

Defences were delivered on behalf of each of the Defendants. That on behalf of Clonmel being delivered on the 4th day of June, 1998.

By notice of motion dated the 20th May, 1999, Clonmel sought leave to serve a third party notice on Frazer. That leave was duly

granted by order of Johnson J made on the 28th day of June, 1999, and in pursuance thereof the notice was duly issued on the 9th

July, 1999. By notice dated the 8th day of November, Frazer applied - as they had advised Clonmel they would - for an order striking

out the third party notice on the grounds that the same had not been served in accordance with the Civil Liability Act, 1961, as

amended. By order of Mr Justice Butler made on the 7th day of June, 2000, the third party notice was struck out for the reasons set

out in the agreed note of the extempore judgment of the learned Judge delivered on that date. It is from that judgment and the order

made thereon that Clonmel appeals to this Court.

The right to serve a third party notice and the time limit within which the same is to be served is set out in s.27(1) of the Civil

Liability Act, 1961, in the following terms:-

“A concurrent wrongdoer who is sued for damages or for contribution and who wishes to make a claim for contribution under

this part:-

(a) shall not, if the person from whom he proposes to claim contribution is already a party to the action, be entitled to

claim contribution except by a claim made in the said action, whether before or after judgment in the action; and

(b) shall, if the said person is not already a party to the action, serve a third party notice upon such person as soon as

is reasonably possible and, having served such notice, he shall not be entitled to claim contribution except under the

third party procedure. If such third party notice is not served as aforesaid, the Court may in its discretion refuse to

make an order for contribution against the person from whom contribution is claimed.”

The regulatory provisions concerning the service of third party notices as set out in the Rules of the Superior Court at Order 16 Rule

2(2) in the following terms:-

“The notice shall, unless otherwise ordered by the court, be served within the time limited for delivering the defence or, where

the notice is served by a defendant to a counterclaim, the reply, and with it there shall be served a copy of the originating

summons and of any pleadings delivered in the action.”

Having regard to the fact that the defence of Clonmel was delivered on the 4th day of June, 1998, and the notice served on the 9th

day of July, 1999, the issue which fell for consideration by Mr Justice Butler was whether Clonmel had complied with the statutory

requirement of serving the third party notices “as soon as is reasonably possible” as required by the express provisions of s.27 of the

Civil Liability Act, 1961.

Much of the written submissions and the oral argument to this Court was directed to the scheme and purpose of the relevant

provisions of the Act of 1961. There can be little doubt as to what that scheme and purpose was. The legislature was understandably

desirous of avoiding a multiplicity of actions. Instead of defendants against whom awards had been made instituting further

proceedings against other parties liable to them in respect of the same set of facts - and indeed those defendants in turn perhaps

instituting even more proceedings against others - the Oireachtas sought to establish a situation in which the rights and liabilities of

all parties arising out of a particular set of circumstances would be disposed of in the same proceedings. It is for that reason that a

defendant was given the right, with the approval of the Court, to serve a third party notice on a potential defendant so that any

claim against him could be disposed of at the same time as that of the claim against the actual defendant. This procedure had

attractions for all of the parties and was desirable in the public interest. Nevertheless the Legislature did not preclude an unsuccessful

defendant in the original proceedings from instituting a substantive action against some other party who, the actual defendant

contended, was liable to him either in tort or in contract. What the 1961 Act did provide was that where the actual defendant in the

original proceedings failed to avail of the third party procedure by serving the third party notice “as soon as is reasonably possible”

and resorted to his original cause of action the relief which he might have claimed therein was subject to the statutory discretion of

the Court to refuse to make an order for contribution in his favour.

The effect of the section was explained by Finlay CJ in delivering judgment in St Laurence’s Hospital .v. Staunton [1990] 2 IR 31 at

36, with which the other members of this Court agreed when he said:-

“I am quite satisfied upon the true construction of that subsection that the only service of a third party notice contemplated

by it and, therefore, the only right of a person to obtain from the High Court liberty to serve a third party notice claiming

contribution against a person who is not already a party to the action, is a right to serve a third party notice as soon as is

reasonably possible. A defendant in an action seeking to claim contribution against a person who is not a party to the

proceedings cannot serve any third party notice at any other time, other than as soon as is reasonably possible.”

The terms in which the time limit was expressed do appear severe. The use of the word “possible” rather than the word “practicable”,

as is invoked elsewhere, suggests a brief and inflexible time limit. It might suggest that if it is physically possible to serve the

appropriate notice within an identified period that any further delay would be impermissible. However, such a draconian approach

would be inconsistent with the nature of the problems to be confronted by a defendant and of the decisions to be made by him or his

advisors. The statute is not concerned with physical possibilities but legal and perhaps commercial judgments. Proceedings cannot

and should not be instituted or contributions sought against any party without assembling and examining the relevant evidence and

obtaining appropriate advice thereon. It is in that context that the word “possible” must be understood. Furthermore, the qualification

of the word “possible” by the word “reasonable” gives a further measure of flexibility. As Barron J pointed out in McElwaine .v. Paul

Vincent Hughes (unreported delivered 3rd April, 1997):-

“Clearly the words “as soon as reasonably possible” denote that there should be as little delay as possible, nevertheless use of

the word “reasonable” indicates that circumstances may exist which justify some delay in the bringing of the proceedings.”

The onus is on the person seeking leave to serve the third party notice to prove the application is brought within the statutory time

limit. Again, it was Barron J who pointed out in McElwaine .v. Paul Vincent Hughes (above) that:-

“Since the obligation is on the defendant to serve the notice within a reasonable time, it seems to me that the onus of proof

of showing that the delay, if delay there is, was not unreasonable is upon the defendant.”

Clonmel sought to explain and justify the delay which has occurred by reference to criminal proceedings which were instituted on the

4th day of August, 1995, against the Corporation, Clonmel and Frazer under the Health Safety and Welfare at Work Act, 1989. Those

proceedings were heard in November, 1998, and the two Defendants and Frazer were duly convicted by Judge Miriam Malone in the

District Court on the 9th February, 1999. One of the offences of which Frazer was convicted was described in the summons in the

following terms:-

“That you, the said accused, being a person who imported and supplied an article, namely a Bestobell gate valve, for use at

work, did, on the 14th of December 1994, fail to take such steps as were necessary to secure that the persons supplied by

you with the said article, namely Clonmel Enterprises Ltd and Dublin Corporation, were provided with adequate information

about the use for which it was designed or had been tested, and about any conditions relating to the said article so as to

ensure that, when in use, dismantled or disposed of, it would be safe and without risk to health.”

The learned District Court Judge found the fact that Frazer had not furnished to the Corporation or Clonmel what the Judge described

as the “crucial document known as WP4” which contained the installation and maintenance instructions in relation to the valve. In the

affidavit grounding the application for leave to serve the third party notice Margaret M Carey, the Solicitor on behalf of Clonmel,

explained the relevance of the criminal proceedings and the finding aforesaid of the learned Judge of the District Court in the following

terms:-

“I say and am instructed that the second named defendant awaited the outcome of these criminal prosecutions before

deciding whether to seek leave from this honourable court to issue a third party notice. I say and believe that if Ashworth

Frazer Limited had succeeded in making out a defence of a substantive nature to the charges made against it the aforesaid

criminal proceedings, the service of a third party notice would have served no purpose. I accordingly say that it was both

reasonable and prudent for the second named defendant to have waited between the date of the delivery of the defence

dated the 4th of June 1998 and the outcome of those proceedings before making this application.”

In the written and oral submissions to this Court Counsel on behalf of Clonmel repeated that argument and drew attention to the fact

that the postponement of an application for leave to issue third party proceedings because of outstanding litigation - and that

litigation between other parties - was upheld by this Court in Gilmore .v. Windle [1966] IR 323 and again a delay which was explained

by defendants awaiting a reply to a notice for particulars and a statement of evidence was likewise held by this Court to explain

adequately the time which had elapsed before the application for leave was made (see Connolly .v. Casey [2000] 1 IR 345). Counsel

on behalf of Frazer did draw certain distinctions between the facts of those cases and the instant case. Gilmore .v. Windle was

readily distinguished on the basis that the outstanding proceedings in that case related to the interpretation and application of the

relevant provisions of the Civil Liability Act, 1961, which was then still a comparative novelty and had caused difficulties for

practitioners unfamiliar with its operation. A significant feature of Connolly .v. Casey was the identification of an error in the approach

by the High Court to the decision of the Defendant to await replies to the notice for particulars. It was not, as Mrs Justice Denham

pointed out, essential or even material to ascertain whether the replies to the notice were significant. The issue was whether it was

appropriate in the circumstances of that case to await for the replies whatever material they might provide. In any event the

question whether a defendant has discharged the onus imposed upon him of proving that the application for leave is brought “as soon

as reasonably possible” will depend upon the examination of the facts of each particular case as was pointed out in Connolly .v.

Casey (above).

In the present case all of the Defendants obviously investigated the cause of the accident to enable them to defend the criminal and

civil proceedings against them. There is no doubt that by 1995 at the latest they were fully familiar with the condition of the Bestobell

valve and the fact that it had not been fitted with a spindle collar. It was that fact which formed the greater part of the particulars

of negligence alleged against Frazer in the third party notice.

Apart from the information obtained by the examination of the valve their own inquiries would have advised Clonmel as to the material

furnished to them by Frazer in relation to the equipment. However insofar as the District Court criminal proceedings were helpful or

relevant to Clonmel in determining whether to institute proceedings against Frazer the fact is, as Mr Peter Lennon set out in

paragraph 6 of the affidavit sworn by him on the 19th of January, 2000, that the summonses and books of evidence and statements

of the prosecutor were available to all of the parties not later than October, 1995. Clonmel themselves were aware or should have

been aware that they were not provided with appropriate information concerning the special features of the valve. Their belief in that

regard was supported by the investigations made by the Inspector on behalf of the National Authority for Occupational Safety and

Health Fionan de Barra who prosecuted Frazer for their failure to supply such information. The statement of Mr de Barra’s evidence

was available to Clonmel. The application for leave to issue third party proceedings was not postponed because of any want of

information or evidence.

In the affidavit of Margaret M Carey sworn on the 4th day of February, 2000, she explained the effect of the District Court

proceedings in the following terms:-

“As a result of the District Court proceedings, the second defendant’s state of knowledge with regard to the evidence of the

third party’s involvement was considerably enhanced and, whilst Mr Lennon takes exception to my referring to the criminal

case, I do so to illustrate that, prior to those hearings, the second defendant was very much in the dark as regards the

precise involvement of the third party and would not have been justified, in my view, in initiating third party proceedings on a

speculative basis. Following the hearing, it was in no doubt that a strong case could be made out and I believe it was

reasonable to await the outcome of the prosecution in all of the circumstances.”

Ms Carey is clearly correct in saying that the District Court proceedings “enhanced” Clonmel’s state of knowledge and following those

proceedings Clonmel were in a position to make a “strong case”. These were advantages which accrued to Clonmel by postponing

their decision to institute the third party proceedings but the quest for certainty or verification must be balanced against the

statutory obligation to make the appropriate application “as soon as reasonably possible”. In my view it was indeed possible for

Clonmel on the information available to it to make a prudent and responsible decision several months before the application was

brought before Mr Justice Johnson. In those circumstances Clonmel failed to comply with the statutory requirement and the learned

trial Judge was correct, in my view, in setting aside the third party order. I would dismiss the appeal.