Plaintiff denied leave to amend claim for fraud; court struck out specific replies as not claim particulars.

Neutral Citation: [2015] IEHC 5

THE HIGH COURT

COMMERCIAL

[2014 No. 2229 P]

[2014 No. 39 COM]

BETWEEN

JAMES ELLIOTT CONSTRUCTION LIMITED

PLAINTIFF

AND

KEVIN LAGAN, TERRY LAGAN, JOHN GALLAGHER, IRISH ASPHALT LIMITED AND LAGAN CEMENT GROUP LIMITED

DEFENDANTS

JUDGMENT of Ms. Justice Costello delivered on 14th day of January, 2016.

The plaintiff’s motion

1. In these proceedings the plaintiff seeks leave to amend its statement of claim pursuant to O.63A, r.6(1)(b)(v) and/or O.28, r.1 of

the Rules of the Superior Courts by including two additional pleas of deceit, one against the fourth named defendant and the other

against the remaining defendants. The application has been brought after I have delivered three written judgments in these

proceedings, two of which concerned the defendants’ motions to compel the delivery of further and better particulars of the plaintiff’s

case. The background facts and the nature of the case have been set out previously and I do not propose to restate them here.

2. The plaintiff says that the proposed pleas in fact do not form part of its case in fraud against the defendants. The application was

brought in the light of the judgment delivered this Court on 14th July, 2015. In further replies to particulars, the plaintiff stated that

test results given in evidence by or on behalf of the fourth named defendant in earlier proceedings between the plaintiff and the

fourth named defendant were falsified. I indicated that:-

“[u]ndoubtedly, these are serious and new allegations of deceit and fraud. The plaintiff is perfectly entitled to bring a

claim based on this fraud if it so wishes. However, it must be properly pleaded and it is not appropriate to introduce it in

the fourth version of a reply to particulars arising out of the Statement of Claim dated 4th February, 2014.”

3. It was clear from the presentation of the plaintiff’s application in court that the proposed amendments are not designed to

elaborate upon or expand the plaintiff’s claim against the defendants. Rather, it is in essence a reply to the defence of the

defendants where they plead that there were test results produced from the Bay Lane Quarry throughout the period of its production

life which indicated that the stone being produced was capable of producing clause 804 and 3 inch down products. By implication, the

defendants are asserting that these test results are genuine and valid and the plaintiff does not accept that this is the case. The

plaintiff states that it will wish to contest any evidence the defendants may advance at trial to that effect. Therefore it wishes to

amend the Statement of Claim to plead that any such results cannot be genuine.

4. In my opinion this application to amend the Statement of Claim is misconceived. It is not designed to elucidate the matters in

controversy between the parties. It is directed towards the evidence which it is anticipated that the defendants will adduce at the

hearing of the action, no more. Expressly it does not form part of the case in fraud. That being so, I cannot see that there is any

need for the amendment.

5. The plaintiff indicated that it was apprehensive that if the amendment were not permitted that, at the trial of the proceedings, the

defendants would object to any evidence on the part of the plaintiff or any cross-examination on the part of the plaintiff contesting

the genuineness or validity of the test results. Firstly, I do not accept that this is a correct basis upon which to amend pleadings.

Secondly, I do not believe that my refusal of the application to amend the proceedings for the reasons I have set out in any way

precludes the plaintiff from dealing with such evidence as the defendants may adduce at trial as they see fit within the normal rules

governing a plenary hearing. In particular, my judgment is not to be taken as precluding the plaintiff in anyway from challenging any

evidence which the defendants may adduce at the trial of these proceedings.

6. In addition I should point out that the proposed pleadings do not in fact bring clarity to the issues between the parties, as any

amendment to proceedings ought.

7. As a plea in fraud, I am not satisfied that this meets the level of particularity required when alleging fraud. It leaves the defendants

in the dark as to the precise nature of the wrong alleged to have been committed. If it is not a plea in fraud, as appeared to be the

case in the replies to particulars of 14th January, 2015, of the plaintiff, then it is equally unsatisfactory as implying fraud without

actually pleading it correctly. Accordingly, I refuse the application for leave to amend the Statement of Claim.

The defendants’ motions

8. The fourth named defendant brought a motion pursuant to O.19, r.16 and/or O.19, r.27 of the Rules of Superior Courts or the

Court’s inherent jurisdiction seeking to strike out portions of the plaintiff’s replies to particulars dated 14th January, 2015, in reply

42(d) and 13th February, 2015, in reply 51 as set out in the schedule to the notice of motion. It also sought to strike out certain

paragraphs in affidavits sworn by the plaintiff’s solicitor, Mr. Daragh O’Donovan, on 16th March, 2015, 24th March, 2015, and 23rd

April, 2015.

9. As I held in my earlier judgment of 14th July, 2015, the replies to particulars numbered 42(d) and 51 raised new allegations of

deceit and it was not appropriate that such allegations be introduced into the case in this fashion. In light of the plaintiff’s application

to amend the Statement of Claim and the elaboration of its case in relation to these matters, it is clear that the allegation of

falsifying or having suspicions as to the veracity or genuineness of test results does not in fact form part of the plaintiff’s claim but

rather its rebuttal of the anticipated line of defence on the part of all of the defendants. That being so, I am satisfied that these

pleas are not in fact particulars of the Statement of Claim and therefore they should not remain in the replies to the particulars of the

Statement of Claim. On the other hand, if they remain in the replies to particulars, then they necessarily form part of the case the

fourth named defendant has to meet at trial. This is not appropriate in the circumstances and I therefore strike out the

sentence“[t]his finding supports grave suspicions on the part of the Plaintiff regarding IAL’s evidence of testing” in reply 42(d) dated

14th January, 2015.

10. I also strike out the following portion of reply 51 to the further and better replies dated 13th February, 2015:-

“[t]o the extent that any test results purported to indicate otherwise, the Plaintiff alleges that these were not genuine

results. Expert evidence was adduced in the Menolly proceedings, tending to cast doubt on the veracity of certain test

results purporting to be the results of testing on Bay Lane rock. Regarding the veracity of testing conducted by IAL, the

Plaintiff also relies on the doubts expressed by the Courts in the context of the JEC –v- IAL proceedings.”

11. I decline to strike out any portions of the affidavits as sought in the notice of motion. The averments do not form part of the

plaintiff’s case which the defendants must meet at trial. There is no prejudice being suffered as a result of the averments.

12. The first, second, third and fifth named defendants also brought a motion seeking to strike out certain replies delivered by the

plaintiff on 14th January, 2015, and 13th February, 2015, to requests for particulars raised by these defendants. Request number 23.1

required the plaintiff to specify each and every test result that each of the first, second and third named defendants is alleged to

have been aware of. The reply lists 14 matters. Numbers 13 and 14 challenge the veracity or reliability or indeed credibility of the

evidence advanced in respect of test results in previous proceedings. In the further reply of 13th February, 2015, it stated that

certain test results produced by the fourth named defendant were not genuine. The plaintiff has fairly stated that its position is that

if the defendants adduce evidence as to test results which indicate that stone produced from the Bay Lane Quarry was capable of

producing clause 804 or 3 inch down, then any such test results are untrue and do not reflect material sourced from the Bay Lane

Quarry. That being so, these pleas are more properly considered as being directed towards any evidence which it is anticipated that

the defendants will lead at the trial of the action rather than comprising particulars relating to the state of knowledge of the

defendants both before the quarry went into production and during the period it was producing product and selling it to the plaintiff

for use in its construction projects. These replies are therefore not particulars of the plaintiff’s claim. Accordingly, for the reasons

explained in relation to the motion of the fourth named defendant I strike out replies 23.1.13 and 23.1.14 of the replies to particulars

dated 14th January, 2015, and the last paragraph of the reply to particular 23.1 of 13th February, 2015.

13. These defendants also seek to strike out the penultimate paragraph under the heading “[p]articular 5.5” of the replies of 13th

February, 2015, including a quote from the judgment of Charleton J. in the High Court in James Elliott Construction Limited v. Irish

Asphalt Limited [2011] IEHC 263. This paragraph is not in fact, and does not purport to be, a reply to the request for particulars. It

reflects a disagreement between the respective firms of solicitors concerning the case advanced and the evidence adduced in those

earlier proceedings between the parties. It is neither necessary for the fair conduct of these proceedings nor appropriate that this

paragraph be struck out and I refuse this relief.

14. For the reasons advanced above I likewise refuse to strike out the averments in paras. 70-73 of the affidavit of Mr. O’Donovan of

16th March, 2015.

Conclusion

15. I refuse the plaintiff leave to amend its statement of claim in the manner proposed. I strike out those portions of the plaintiff’s

replies dated 14th January, 2015, to particular 42(d) and the replies dated 13th February, 2015, to particular 51 of the fourth named

defendant as set out in paras. 8-10 above. I strike out replies 23.1.13 and 23.1.14 of the plaintiff’s replies to particulars raised by the

first, second, third and fifth named defendants dated 14th January, 2015, and the final paragraph of reply 23.1 of the reply dated

13th February, 2015.