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Atkins and Co. Ltd v. Wolfe [2000] IEHC 196 (28th July, 2000)
THE
HIGH COURT
1996
No. 292 COS CT5
IN
THE MATTER OF JOHN ATKINS AND COMPANY LIMITED AND IN THE MATTER OF THE
COMPANIES ACTS 1963 - 1990
BETWEEN
MARTIN
WOLFE AND RUTH WOLFE
PETITIONERS
PETER
WOLFE, ANGELA WOLFE, RANGER HOLDINGS LIMITED AND JOHN ATKINS AND COMPANY LIMITED
RESPONDENTS
JUDGMENT
OF Mr Justice Herbert delivered the 28th day of July, 2000.
1. Following
upon the judgment of this Court delivered on the 29th June 2000, a Notice of
Motion was filed dated 3rd July 2000 on behalf of the Petitioners, Martin Wolfe
and Ruth Wolfe, seeking liberty of the Court to re-amend the amended Petition
heretofore delivered in this case.
2. Order
28 Rule 1 of the Rules of the Superior Courts, 1986, provides as follows:-
“the
Court may, at any stage of the proceedings, allow either party to alter or
amend his endorsement or pleadings in such manner and on such terms as may be
just and all amendments shall be made as may be necessary for the purpose of
determining the real question in controversy between the parties”.
________________________
page break ________________________
3. Order
125 Rule 1 of the Rules of the Superior Courts, 1986, defines,
“Pleading”
has
including a petition, and there is nothing in Order 28 Rule 1 of the same Rules
which would render such inclusion repugnant to its operation.
4. There
can be no question but that the re-amendment sought in this case is in the
words of Morris P., in the case of
Rubotham
(infant) -v- M & B Bakeries Limited
[1993] ILRM 219 at 221,
“Fundamental
and introduces into the action a Claim for a relief which has not originally
been made.”
5. In
my judgment in the absence of some special circumstances, as where the party
opposing the amendment has rights existing at the date of the application to
the Court, such as the benefit of the Statute of Limitations, which would be
thereby prejudiced, the mere novelty of the proposed re-amendment does not
represent a barrier to its being permitted by the Courts. I adopt the following
passage from the judgment of Morris P. in the case of
Rubotham
(infant) versus M & B Bakeries Limited
,
(above cited)
“since
Order 28 Rule 1 of the Superior Courts Rules, envisages the making of an
amendment which may be necessary ‘for the purpose of determining the real
questions in controversy’, it appears to me that the fact that this may
be a new and hitherto unpleaded case is not a bar to granting an
amendment”.
6. I
have reached the conclusion that the re-amendment sought by the petitioners is
necessary in the interest of justice and for the purpose of ensuring that what
are very
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3
obviously
the real and principal questions in controversy between the parties are before
the Court. In reaching this conclusion I am satisfied that any prejudice
suffered by the Respondents will be remedied by the adjourned of the trial, an
Order for costs and the imposition of a condition that the Petitioners shall
forthwith furnish to the Respondents an indemnity against all extra costs and
expenses which may reasonably be incurred by the Respondents in dealing with
the re-amendment. (
DPP
-v- Corbett
[1992] ILRM 674 at 678, per Lynch J, adopted by Kinlen J in
Bell
-v- Pederson and Sandoz Ringaskiddy Limited
[1995] 3 IR 511 at 518 and 519).
7. The
Court will permit the delivery of a re-amended petition in the form annexed to
the aforementioned Notice of Motion provided that:
1. The
“particulars” proposed to be inserted into paragraph 11 thereof
shall in lieu be pleaded as a separate and distinct basis of claim.
2. The
“particulars” proposed to be inserted into paragraph 12 thereof
shall in lieu be pleaded as a separate and distinct basis of claim and in the
following manner: -
(a) the
proposed sub paragraphs 12 (3) and 12 (5) shall be conjoined so as to become
one paragraph to be numbered 13.
(b) the
proposed sub paragraphs 12(1) 12(2) 12(4) shall be included in the said
paragraph 13 by way of particulars.
3. The
paragraphs now numbered 13a and 13b in the proposed re-amended petition shall
be re-numbered so that each shall bear a unique sequential number.
4. The
paragraphs of the proposed re-amended petition shall be re-numbered to take
account of the foregoing directions.
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4
8. The
re-amended petition shall be indorsed as provided by Order 28 Rule 9 of the
Rules of the Superior Courts, 1986, and each re-amendment shall be signified by
underlining with two parallel horizontal red lines.
9. Counsel
for the first and second named Respondents and Counsel for the third named
Respondents did not oppose the application by the petitioners to re-amend the
petition, but made the case that the petitioners should not be permitted to
amend without paying not only the costs of the re-amendment and undertaking to
pay any costs incurred by the Respondents consequent upon the re-amendment, but
also all costs incurred by the Respondents and thrown away up to the date of
the adjournment of the proceedings which adjournment was rendered necessary by
the re-amendment. They argued that having regard the terms of Order 28 Rule 1
of the Rules of the Superior Courts, 1986, the necessity for the Court to hold
the balance of justice fairly between the parties meant that without such an
Order in favour of the Respondents the Court was in effect prohibited from
granting the relief sought by the Petitioners.
10. I
prefer to be guided by the dictum of Murphy J., (Barrington J., concurring), in
the course of his judgment in
Aer
Rianta International CPT -v- Walsh Western International Limited
[1997] 2 ILRM 45 at 51 where he held that:-
“If
Justice requires that the amendment be allowed it likewise requires that all
costs and expenses caused thereby should be borne by the Defendant,” (in
that case the party seeking leave to amend),
11. In
the course of determining what would be the appropriate Order for costs to be
made in this case I have considered a number of decisions in this jurisdiction
and in England.
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page break ________________________
5
The
case of
Fahy
-v- PuIlen
102 ILTR 81 was an action for personal injuries arising from a road traffic
accident. In replies to particulars arising out of the statement of claim the
Plaintiff claimed that for her to move her right arm caused severe pain from
her shoulder to the insertion of the deltoid. In giving evidence as the first
witness before a judge sitting with a jury she said in reply to a question from
her Counsel that she had pain and discomfort the whole time in both arms and
both elbows particularly in the left elbow. The trial judge, (Mr Justice
Henchy), on application by Counsel for the Defendant, did not consider that the
jury could properly be told to exclude this evidence, which he ruled
inadmissible, as to pain and discomfort in the Plaintiff’s left arm and
elbow. The jury was discharged and the trial was adjourned. The Defendant was
awarded,
“the
costs of and incident to this Order which will be thrown away in consequence of
this adjournment.”
12. The
Plaintiff appealed to the Supreme Court. The Supreme Court allowed the
Plaintiff’s appeal. In his judgment, Ó Dálaigh C.J, held:-
(1)
that
no amendment of the pleading was necessary, but that had such an amendment been
necessary circumstances might have been different,
(2) that
the Defendants could not have been taken by surprise because on an examination
by the Defendant’s medical expert of the Plaintiff a week before the
trial she had told him and he had recorded that both arms were disabled and
were causing pain,
(3) that
the general words used in the replies to particulars were sufficiently apt to
embrace the evidence to which objection was taken.
13. The
Court directed that the Defendants should bear the costs of the adjournment of
the action, such costs to be on the basis of
“costs
of the day”
as
defined by
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6
14. Order
99 Rule 37 (33) of the then Rules of the Superior Courts, replaced as of the
1st of October 1986 by Order 99 Rule 37 (33) of the Rules of the Superior
Courts 1986.
In
the case of
O’Driscoll
-v-Irish Shell and BP Limited
[1968] IR 215, an additional injury to the Plaintiff had become apparent after
pleadings were closed. Though the Defendant’s medical expert had noted
the contraction of the Plaintiff’s index finger in an examination carried
out after the close of pleadings, no notice of additional injury was served by
the Plaintiff on the Defendants. The jury was discharged and the trial was
adjourned when Counsel for the Plaintiff mentioned this injury in his opening
of the case. Dismissing the Plaintiff’s appeal and referring to the
decision in
Fahy
-v- Pullen
,
(above cited) the Supreme Court (Mr Justice Walsh), held that
“the
correct order for costs in such circumstances is an Order of costs of the day
and not an Order for costs thrown away.”
In
the case of
Kielthy
-v- Ascon Limited
[1970] IR 122, the Plaintiff was awarded the costs of a three day trial to
include costs of a day when the trial had to be adjourned because the foreman
of the jury through a misunderstanding failed to attend and Counsel for the
Defendants was unwilling to proceed in his absence. Dismissing the
Defendants’ appeal to the Supreme Court, Ó Dálaigh C. J,
held that the Plaintiff was entitled,
“in
addition to the general costs of the trial, to have the costs which were thrown
away because of the adjournment which occurred on the second day of the
trial”.
15. “Costs
of the day” have been defined as meaning, “all costs incurred, and
which will be thrown away in consequence of the slip”.
(Bourgoine
-v- Taylor
(1878) 47 LJCH 542 at 543 per Jessell L.J.) Order 99 Rule 37 (33) of the Rules
of the Superior Courts, 1986, provides as follows;-
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7
“Where
a cause being in the list for hearing is ordered to be adjourned upon payment
of costs of the day, the party to pay the same shall pay to each party to whom
costs are awarded if entitled to appear by three Counsel £180, if by two
Counsel £110, and if by one Counsel £70 unless the Court shall
otherwise direct. The foregoing sums do not include witnesses’
expenses”.
16. None
of the considerations outlined by Ó Dálaigh C.J. in
Fahy
-v- Pullen
(above
cited) arise in the present case. The Respondents are now faced with having to
prepare for and to meet what is substantially a new case raising new issues of
fact and new and very complex issues of law. An Order for costs of the day in
favour of the Respondents as defined by Order 99 Rule 37(33) of the Rules of
the Superior Courts 1986 would not in my judgment be sufficient in this case,
“for the attainment of justice or for enforcing or defending the rights
of the Respondents”.
In
the case of
Ascherberg,
Hopwood and Crew Limited -v- Casa Musicale Sonzogno di Piero Ostali Societa in
Nome Collettivo and Others
[1971] 3 All ER 38, the trial was adjourned after three days of hearings and
the Applicants were permitted, (notwithstanding the opposition of the Plaintiff
and the first named Defendant, the other Defendant, not being present or
represented), to further re-amend their defence in order to adduce expert
evidence that in Italian law certain terms of art in Italian agreements,
translations of which had been agreed between the parties, had a special
meaning and as to the general state of Italian Copyright Law. In permitting the
amendment Ungoed-Thomas J., imposed a number of terms, one of which was as
follows;-
“The
Applicants shall bear their own costs of the amendment and pay to the other
parties in any event their costs of their consequential amendments
________________________
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8
and
their costs thrown away by the adjournment, such other party’s costs to
be as between party and party and such other parties are to be at liberty to
proceed forthwith with the taxation of such costs but not for their
payment”.
17. In
the Court of Appeal the Applicant’s argument against this condition is
set out in the judgment of Russell L.J, at page 42 of the Report as follows:-
“They
say that while it would be right that they should pay the costs of and
occasioned by their amendment and perhaps any costs that have been incurred by
the other parties with an eye to the trial taking place at or near the fixed
date they should not have to pay in any event the costs of the three day
hearing. They say to us that the proper order as to those costs should have
been either that all costs should have been costs in the cause, or reserved, or
that no Order should have being made.”
18. The
Court of Appeal (Russell, Karminski, L.J.J., and Sir Gordon Willmer), rejected
this argument and confirmed the Order of the trial judge. In the course of
their Judgments, Russell, L.J, and Karminski L.J, referred, but in a different
context, to the decision in
E.M.
Bowden’s Patent Syndicate Limited -v- Herbert Smith and Company
(1904) 2 CH 86
and
122, where the Plaintiff as the equitable owner of a patent was given liberty
to amend its pleading by joining the legal owner, (failing which the
Plaintiff’s case would have been dismissed), but on terms that the
Plaintiff paid the Defendant’s costs of the two days of hearing up to
that point.
19. In
my judgment the facts of the present case are significantly different from
those in
Fahy
-v- Pullen
(above
cited), and
O’Driscoll
-v- Irish Shell and BP Limited
(above
________________________
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9
cited).
As is apparent from the re-amended petition a number of the matters in issue
between the parties at the adjourned hearing will remain issues at the next
hearing. However, for this Court to allow only, “costs of the day”,
as described in
Flynn
and Halpin
,
“Taxation of Costs” (1999), pages 130 and 137, would be to fail to
recognise the substance and fundamental importance of the re-amendment, the
time and circumstances at and under which the re-amendment came to be sought
and the probable impact of the re-amendment on the future course and conduct of
the proceedings. On the other hand to allow costs to the Respondents on a full
party and party basis as if the petition had been discontinued or had been
fully heard and determined in favour of the Respondents would in my judgment be
unjust and oppressive to the Petitioners.
20. What
in my judgment will do justice between the parties is an Order for costs in
favour of the Respondents on a party and party basis but confined to
Counsels’ fees, witnesses’ allowances and expenses, the
Solicitor’s proper charges for attending in Court and such other fees
disbursements and charges as relate solely to the preparation of the adjourned
trial and which will require to be repeated or will be of no value at the next
hearing. The amendments made to the petition are so material that it is
virtually certain that even should the same Counsel remain on in the matter
they will nonetheless have to newly prepare the case and on this basis I
consider it reasonable to allow brief fees to Counsel for the Respondents and
in addition four only refreshers to Counsel for the first and second named
Respondents and one only refresher to Counsel for the third named Respondents.
21. The
Respondents are also to be entitled to the costs of taking this Judgment and
the costs of taking the Judgment of the Court delivered on the 29th June 2000.
They are also to have the costs of the Motion to re-amend the Petition and all
costs and expenses of their consequential amendments. The Petitioners shall
forthwith furnish to the Respondents an indemnity in respect of these latter
costs.
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10
22. It
was urged upon me by the Respondents that I should as a condition of permitting
the Petitioners to re-amend their Petition and proceed with this action require
the Petitioners to give security for whatever costs the Court might award
against the Petitioners or alternatively that I should not alone permit the
Respondents to proceed forthwith with the taxation of those costs but should
also grant liberty to them to seek payment of those costs as soon as taxed and
make such payment a condition of the Petitioners proceeding further with this
action.
At
page 137 of
Flynn
and Halpin
,
“Taxation of Costs”, the authors referring to, costs of the
day” and “costs thrown away” and citing
Greenslade,
“On Costs”, p.1 25 (1993) REL 3, state that:-
23. “Such
costs will not usually be recoverable until the conclusion of the case or
matter, but the circumstances may well justify an order for “costs thrown
away to be taxed and paid” which will entitle the party in whose favour
the order is made to have his bill taxed immediately”.
24. An
order for security for the costs awarded was made by the trial judge in the
case of
Ascherberg
Hopwood -v- Casa Musicale
,
(above cited). The purpose of this order was described by Russell L.J. In the
Court of Appeal as being
“To
safeguard those other parties as to their costs thrown away by the adjournment,
which as I have said, had been ordered to be taxed but not to be immediately
paid. It was in effect a sort of substitute for an order for immediate
payment.”
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11
(Page
43). The learned Lord Justice went on to say:-
“The
way I look at it for myself is this: that if it is otherwise -as I think it
is,- a proper case for the Judge in his discretion to order security for these
costs, then it is for the Applicants - who ultimately will have to pay the
costs - to satisfy the Court that such security is unnecessary because the
other party is already secured in that he has funds of the Applicants in his
hands or will shortly have such funds in his hands.”
In
the case of
Stanley
-v- Aer Lingus TEO
114 ILTR 26, a Plenary Summons and a Statement of Claim were delivered on the
16th June 1971 claming damages for personal injuries suffered by the Plaintiff
while an aircraft was in flight. The claim was based on the provisions of
Section 21 of the
Air Navigation and Transport Act, 1936. The Defence delivered
on the 6th October 1971 pleaded
inter
alia
that
the Statement of Claim disclosed no cause of action as
Section 21 of
the Act
did not apply in the circumstances. On the 18th February 1972 the Plaintiff
asked the Defendants by letter to agree to have the erroneous reference to
Section 21 deleted but the Defendants refused. Notwithstanding this refusal and
the pleading in the Defence nothing further was done by the Plaintiff and the
case was set down for trial. An Application to amend the Statement of Claim was
not made until the day of the trial. Murnaghan J., held that heavy costs had
been incurred by the Defendants but none the less adjourned the case to enable
a new Statement of Claim to be delivered but on condition that the Plaintiff
paid all costs incurred by the Defendants from the 16th June 1971 to the 18th
February 1972 together with the costs of the Motion to amend.
25. In
each of those cases there may have been facts which justified the Judge in
exercising his discretion in imposing the condition which he did. In the
present case there are
________________________
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12
no
facts in evidence before me which would justify the making of an order that the
Petitioners as a condition of being permitted to re-amend their petition and
proceed with the action should either pay the costs which the Court has awarded
to the Respondents or should give security for those costs.
26. There
is no evidence before me that the Petitioners would be unable to pay or would
seek to avoid paying costs. Apart from any other assets which they might have
in the jurisdiction, as to which I have no evidence, the Petitioners are the
admitted owners of 10.172
per
centum
of
the shares in John Atkins & Company Limited. This company, according to a
statement of affairs presented at a meeting of the company on the 21st of May
1996 for the purpose of Section 60 of the Companies Act, 1963, had capital
reserves of £1,812,984.00 and in the year ending 31st October 1997 paid an
increased dividend notwithstanding an operating loss of £61,927.00. Having
regard to the usual one third basis upon which a sum to be lodged as security
for costs is assessed it seem to me that no case could be made by the
Respondents that the Petitioners would not be able to pay the costs
hereinbefore awarded.
27. At
paragraph 9 of the Affidavit of Cormac O’Hanlon, Solicitor, of J W
O’Donovan, Solicitors who are solicitors for the Petitioners in these
proceedings, sworn on the 3rd of July 2000 for the purpose of grounding the
Motion to re-amend it is stated as follows:-
“I
believe that these issues together with the other related issues in respect of
which liberty to amend is now sought, were not pleaded in the Petition or in
the Amended Petition simply because neither I nor Counsel believed it necessary
to do so. Rather, we perceived that the Petition and Amended Petition were
adequate in this present form to encompass those issues. It is both appreciated
and accepted that the learned trial Judge has ruled otherwise, but the
Petitioners legal advisors at all stages prior to the ruling of
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13
the
learned trial Judge perceived that the pleadings were in order and that they
encompassed the two particular issues to which I have referred.”
28. This
averment is not rebutted in any replying Affidavit by or on behalf of the
Respondents. There is no evidence before me that either through negligence or
recklessness the Petitioners permitted this action to come to trial knowing
that the Petition was deficient and that permission to amend would have to be
sought from the Court, meanwhile allowing the Respondents to incur very
substantial costs and expenses.
29. In
my Judgment for this Court in these circumstances to order that the Petitioners
should pay costs by this Judgment awarded to the Respondents as a condition of
their being permitted to re-amend the Petition and to rely upon these
re-amendments at the adjourned hearing of this action would be to penalise the
Petitioners for the error made and I do not accept that this Court has any such
power, or if it did that on the evidence I have any rational or logical
justification for invoking that power.
30. In
the course of his Judgment in
Cropper
-v- Smyth
(1883) 26 Ch. D. 700 at 710/711, Bowen L.J. held as follows:-
“It
is a well established principle that the object of the Court, (in granting
leave to amend), is to decide the rights of the parties, and not to punish then
for mistakes they make in the conduct of their cases by deciding otherwise than
in accordance with their rights....Courts do not exist for the sake of
discipline but for the sake of deciding matters in controversy and I do not
regard such amendment as a matter of favour or grace....”
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14
31. This
passage had been cited with approval by Flood J., in
Palamos
Properties Limited and O’Neill -v- Brooks and Ors
[1996] 3 IR 597 at 603 by the Supreme Court, (Murphy J), in
Aer
Rianta International CPT -v- Walsh Western International Limited
[1997] 2 ILRM 45 at 51 and O’Sullivan J in
Cornhill
and Ors -v- The Minister for Agriculture and Food,
13th of March 1998, unreported, but copy judgment available).
32. I
therefore decline to order that the Petitioners give security for costs or pay
such costs as a condition of being permitted to re-amend their Petition and
proceed with this action. I will however order that the Respondents be at
liberty to proceed forthwith with the taxation of the costs hereinbefore
awarded, but not for their payment.
© 2000 Irish High Court
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