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High Court of Ireland Decisions |
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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Kennedy v. Law Society of Ireland & Ors [2003] IEHC 628 (14 February 2003) URL: http://www.bailii.org/ie/cases/IEHC/2003/628.html Cite as: [2003] IEHC 628 |
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[1996 No. 155JR]
JUDICIAL REVIEW
BETWEEN
APPLICANT
RESPONDENTS
JUDGMENT of Mr. Justice Kearns delivered the 14th day of February, 2003.
The motion before the court seeks leave pursuant to Order 28 of the Rules of the Superior Courts to amend Points of Claim delivered on the 25th March 1998 and is brought in the aftermath of a judgment delivered by this court on the 5th of October 1999 and the remittal of the matter to this court for further hearing by Order of the Supreme Court dated 11`h January, 2002. The facts of the case are set out fully in the court's judgment already delivered.
The grounding affidavit of Michael Delaney sworn on the 10`h October 2002 details the history of the legal proceedings and contains the following paragraphs of particular relevance to the present application:
"8. I say and believe that until concessions as to their motivations for the said investigations were made by the respondents to this honourable court on the second day of the hearing aforesaid before the court, the findings of fact as determined by this honourable court and the decisions of the Supreme Court as referred to herein, the applicant was unable, in view of the continuing denials aforesaid, to prove to the requisite standard of proof his suspicions that the respondents were pursuing the said investigations for unauthorised purposes and were acting in excess of statutory powers and unlawfully.
9. I say that in consequence of the said judgments and orders, I was advised by counsel that it was necessary to amend the points of claim, to reflect the decisions and orders of the Supreme Court, the findings of fact as made by this honourable court and the judgment and orders of the Supreme Court, so as to determine the real questions and issues in controversy between the parties. These amendments include claims for damages for negligence and breach of duty (including statutory duty), trespass (as the court has established that an investigating accountant such as the third named respondent could not be appointed for the investigation of fraudulent claims, her entry on to and remaining on the premises of the applicant was and remained a trespass), breach of fiduciary duty, breach of contract, abuse of powers (including statutory power), trespass to goods, conversion, detinue, misfeasance of public office and abuse of civil process, - the first named respondent issued injunctive proceedings against the applicant seeking inter alia relief as more particularly set out in the draft amended points of claim and underlined in red.
10. I further say and am advised by counsel that although new claims for damages are being made in respect of new causes of action, they arise out of the same facts as established by the Supreme Court and this honourable court and are already in issue as to damages in respect of the claims previously made. I further say and I am advised by counsel that the amendments referred to above are necessary for the determination of all the real questions in controversy between the parties.
11. I say and believe that at all material times hereto the respondents were well aware of the concerns of the applicant as to the nature and scope of the said investigation and in particular the "hidden agenda" of which the applicant sought confirmation and clarification. I further say and believe that the respondents well knew that the concerns of the applicant arose out of their misrepresentations and lies to him about the true nature, scope and extent of what they were doing. I respectfully submit therefore that no question of prejudice, by surprise or otherwise, to the respondents can arise from an amendment to the pleadings.
12. I say and believe that the applicant was not until evidence had been heard at the trial aforesaid in possession of adequate proof of the facts necessary to ground the additional claims now made. He was further fettered by the undertakings that, despite his misgivings, he was compelled to give to this honourable court to continue to co-operate with the said investigation. I further say and believe that he was not then in a position to assert such claims so as to include such in his points of claim, until such time as the above entitled matters had been subjected to judicial inquiry. I further say that the trial aforesaid was not, at the suggestion of the learned trial judge and by consent of the parties, a trial of all issues in controversy between the parties but rather a determination of the issues referred to in the judgments and the issue of damages remains. "
A replying affidavit was delivered by the respondents on or about the! 20" of November 2002 and in brief it raises the following issues:
(a) that there has been a part hearing of the action and the applicant is precluded from amending the pleadings arising thereafter
(b) that I, as trial judge, found facts that would prevent the applicant from amending the points of claim
(c) that the amendment or amendments introduce new causes of action which are as such statute barred
(d) that the applicant had sufficient knowledge to bring the actions at an earlier date and that the Statue of Limitations accordingly arises.
Order 28 Rule 1 of the Rules of the Superior Courts provide:
"The court may, at any stage of the proceedings, allow either party to alter or amend his endorsement of pleadings in such manner and on such terms as may he just and all amendments shall he made as may he necessary for the purposes of determining the real questions and controversy between the parties. "
No argument or issue arises in the instant case that any distinction should be drawn between judicial review proceedings and plenary proceedings (both of which were brought and consolidated in this case) for the purpose of determining the appropriate principles which would enable the court to exercise its discretion to amend.
SUBMISSIONS OF THE PARTIES
Mr. Hayden SC on behalf of the applicant submits that all the amendments sought to the Points of Claim arise out of the same set of facts and are necessary to determine the real questions and controversy between the parties and can be made without in anyway prejudicing the position of the defendants. No prejudice as such, other than inability to plead the Statute of Limitations, had been demonstrated by the defendants. Mr. Hayden submitted that while in the ordinary course a new claim could not be advanced in the course of any action after the expiry of the time limit under the statute, the instant case fell within the category of cases where leave to amend may be allowed where the new cause of action arises out of the same facts or substantially the same facts as those already pleaded. Alternatively, the `concealment' by the Law Society of the `hidden agenda' from the applicant was such as to deprive the respondents of the entitlement to invoke the statute.
In the course of his submission, Mr. Hayden referred to a large number of authorities, including Falamos Properties Limited v Brooks [1996] 3 I.R. 597, Bell v. Pederson & Ors [1995] 3 I.R. 511, Rubotham v M & B Bakeries Limited In Liquidation) & Ors [1993] I.L.R.M. 219, Cornhill & Ors v The Minister for Agriculture & Ors (Unreported decision of O'Sullivan J., 13" March 1998), D.P.P. v Corbett [1992] I.L.R.M. 674, Ketteman v Hansel Properties Limited [1987] AC 189 and Cropper v Smith [1884] 26 Ch D 700.
Having reviewed a number of these cases, Flood J. in Palamos Properties Limited v Brooks stated as follows (at p. 603):
"In my opinion these decisions amount to this. That within the facts underlying the claim before the court there must be such evidence from which an inference can reasonably be drawn as to why the plea which is sought to be introduced by way of amendment was not put in the original defence or express evidence given to explain the failure in a manner which renders the omission broadly excusable if not actually justifiable. "
In Bell v Pederson, Kinlen J. stated (at p. 519):
"The main criteria in any case such as the present is to try to do justice between the parties which is why Order 28 is so wide. "
Mr. Hayden submitted that a comprehensive statement or relevant principles was to be found in Aer Rianta International CPT v Walsh Western International Limited [1997] 2 I.L.R.M. 45 where in the following passage (at p. 50) Murphy J. stated as follows:"Flow the court exercises its discretion was summarised in the case of Cropper v. Smith II883] 26 Ch. D. 700 at pp. 710-711:-
"... it is a well established principle that the object of the courts is to decide the rights of the parties, not to punish them for mistakes they make if? the conduct of their cases by deciding otherwise than in accordance with their rights ... I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the court ought not to correct, if it can be done without injustice to the other party. 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... it seems to me that as soon as it appears that the way in which a pay°ty has framed his case will not lead to a decision on the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right.
In Ketteman u Hansel Properties Limited [1987] AC 189 Lord Keith of Kinkel explained the nature of an injury to one party resulting from an amendment to pleadings that would render liberty in that behalf an injustice to
the other party. He explained the position (at p. 203 of the report) as follows: - `The sort of injury which is here in contemplation is something which places the other party in a worse position from the point of view of presentation of his case than he would have been in if his opponent had pleaded the subject-matter of the proposed amendment at the proper time. If he would suffer no prejudice from that point of view, then an award of costs is sufficient to prevent him from suffering injury and the amendment should be allowed. It is not a relevant type of prejudice that allowance of the amendment will or may deprive him of a success which he would achieve if the amendment were not to be allowed.'
Lord Keith of Kinkel was in fact delivering a minority judgment on the appeal to the House of Lords on the issue as to whether the defendant should have been given leave to amend their defence so as to plead the Statute of Limitations at a time when the proceedings had reached the stage at which counsel were making their closing address to the court. Nevertheless I do not doubt that the general observations of Lord Keith aforesaid represented the views of the, House of Lords. Indeed it is inescapable that every amendment to a defence is intended to raise, and presumably will raise, further obstacles for a plaintiff. "
Submitting that the Law Society could not be surprised or prejudiced by the proposed amendments contained in the points of claim, Mr. Hayden referred to the following observations of Keane J. (as he then was) in Magee v. O'Reilly [1996] 2 I.R. 229 at p. 233:
"The whole purpose of a pleading, be it a statement of claim, a defence or reply, is to define the issues between the parties, to confine the evidence of the trial to the matters relevant to those issues, and to ensure that the trial mcy proceed to judgment without eitherparty being taken at a disadvantage by the introduction of matters not fairly to be ascertained from the pleadings. In other words a party should know in advance, in broad outline, the case he will have to meet at the trial. "
Mr. Hayden also relied on Wildest v Bank of Ireland [2001] 1 ILRM 24 as further authority for the proposition that where a respondent is aware in general terms of the nature of the plaintiff's claim, this was a matter going to the exercise of discretion so as to permit an amendment absent some material prejudice to the respondent.
Mr. Hayden then turned his attention to the issue of whether or not the respondents could legitimately claim to be prejudiced on the facts of this particular case by being deprived of the opportunity to plead the Statute of Limitations if an amendment were to be granted. He cited the following passage from the judgment of Lord Denning, MR in Chatsworth Investments Limited v Cussins (Contractors) Limited [1969] 1 All E.R. p. 1.43 (at p. 145):
"The courts informer times fettered themselves by the rule of practice in Weldon v. Neal [1887] 19 QB D 394 which was applied rigidly and strictly. Any amendment was disallowed if it would deprive the defendant of a defence of the Statute of Limitations. But that rule of practice was found to work injustice in many cases. The new RSC, Order 20, R. 5 (2), (3), (4) and (5), has specifically overruled a series of cases which worked injustice. Since the new rule, I think we should discard the strict rule of practice in Weldon v. Neal. The courts should allow an amendment whenever it is just so to do, even though it may deprive the defendant of a defence under the Statute of Limitations. The present case is a good instance. It is obviously just to allow the amendment. All the trouble stems from the action of the defendant themselves in taking the self same name as the original contracting party. Anyone would be deceived by it. The defendants own solicitors were deceived. They did not discover the truth until the last moment just before they put in the defence. The defendant should not be allowed to take advantage of a confusion which they produced themselves. "
Mr. Hayden relied strongly on this authority as suggesting that, the state of affairs covered by the word `confusion', constituted a lower threshold requirement than the `concealment' of which the Law Society had been responsible, and was thus sufficient to permit an amendment.
In Krops v. Irish Forestry Board Limited [1995] 2 I.R. 113 Keane J. considered whether in the absence of any rule in Ireland corresponding with the English rule of 1965, the court should apply the practice in Weldon v. Neal to cases coming before the courts in Ireland. At p. 121 he stated:-
".. . pleadings which initiate an action in this court carry with them from the time they are issued or delivered the potentiality of being amended by the court in the exercise of its general jurisdiction to allow a party to amend his endorsement or pleadings "in such manner and on such terms as may be just". Where, as here, an amendment, if allowed, will not in any way prejudice or embarrass the defendant by new allegations of facts, no injustice is done to him by permitting the amendment. In that sense, it is true to say that the amendment does not in truth deprive him of a defence under the Statute of Limitations, 1957- since the proceedings were always capable of amendment in such manner ass might be just and in order to allow the real question in controversy between the parties to be determined, it cannot be said that the defendant was at any stage in a position to rely on the Statute of Limitations, 1957
The evolution of the law in the neighbouring jurisdiction demonstrates, I think, that the difficulties that have arisen can be traced, not so much to the decision in Weldon v Neal, as to an over rigid application of the principle laid down in that case. Where, as here, the plaintiff seeks to add anew cause of action arising out of - to borrow the words of the English rule - "the same facts or substantially the same facts"; there seems no reason why this court, even in the absence of a corresponding rule in this jurisdiction, should be precluded from permitting such an amendment.
Mr. Hayden also referred to the judgment of Kinlen J. in Heffernan v Brendan O'Herlihy (Unreported judgment delivered the 3`d of April 1998) in which he considered the kind of conduct on the part of a defendant which would disentitle him from raising a defence under the Statute of Limitations. Kinlen J. considered and adopted the views expressed by Denning MR in King v Victor Parsons & Company [1973] 1 WLR 29 in which he stated (at pp. 33-34):
"In order to show that he concealed the right of action by fraud, it is not necessary to show that he took active steps to conceal his wrong doing or breach of contract. It is sufficient that he knowingly committed and did not tell the owner anything about it. He did the wrong or committed the breach secretly. By saying nothing he kept it secret. He conceals the right of action. He conceals it by fraud as those words have been interpreted in the cases. To this word `knowingly' there must be added recklessly'.
Kinlen J. also cited the following passage from p. 34 of King v. Parsons as follows:
"If however the defendant was quite unaware that he was committing a wrong or a breach of contract it would be different. So if by an honest blunder he unwittingly commits a wrong ... or a breach of contract, ... then he could avail himself of the Statute of Limitations. "
Kinlen J. went on to say:
"This decision has been approved in this jurisdiction in McDonald v McBain (1991] ILRM 764 and because of the wide ambit produced by judicial interpretation there was another(sic) in the United Kingdom in the Limitation Act (UK) Act 1980 and now a plaintiff must show any facts relevant to the plaintiff's right of claim has been deliberately concealed from him by the defendant.
Mr. Hayden submits that there was a deliberate concealment of the true agenda in this case from the applicant which persisted through the hearings before Costello J. and was only brought to an end on the second day of the hearing before this court as a result of a direct question put by me to counsel for the Law Society. This fact, Mr. Hayden submitted, either deprived the respondents altogether from entitlement to invoke the statute, or, alternatively, was a very weighty matter to be taken into account in the exercise of the courts discretion to permit amendment of pleadings.
Finally, Mr. Hayden referred to a decision of the Court of Appeal in England in Singh v Atombrook Limited [1989] 1 All E.R. 385 as an authority whereby the court can in principle allow a plaintiff to amend his writ even after final judgment. However, that particular case concerned an amendment sought simply to substitute the defendants correct name for the incorrect name under which he was sued.
In reply, Mr. Feeney SC on behalf of the Law Society contended that the instant case was unique and without precedent in any of the authorities cited. The present application was a bold attempt to re-cast the pleadings in the light of findings of fact and law made by this court and findings of law made by the Supreme Court. The applicant knew, Mr. Feeney submitted, of each and every one of the claims now sought to be incorporated in the Points of Claim before he came to the High Court for the initial hearing. The grounding affidavit sworn in support of the application made it abundantly that the amendments sought were to reflect the decision of both the High Court and the Supreme Court on matters which by agreement had been allowed proceed to a conclusion with evidence tendered by both sides. It would, Mr. Feeney submitted, be invidious, unjust and unfair to now require the respondents to meet additional claims and new causes of action which the applicant believed could be identified as a result of the High Court or Supreme Court judgments.
The true position was, Mr. Feeney asserted, that Mr. Gilhooly had informed this court in the course of his opening address that he would prove' that a `hidden agenda' underpinned the actions of the Law Society.
Mr. Feeney further submitted that the essential flaw in the applicant's argument was that it conflated notions and considerations of `knowledge sufficient to plead a case' with the notion of `evidence sufficient to establish the case'. At all stages the applicant had the former, sufficient to claim in every respect the claims now sought to be added. The court, he submitted, could only exercise its jurisdiction on the facts of the particular case and in this instance the facts were most unusual in that there had been a hearing, conclusive findings of fact and of law followed by judgment, an appeal, a further determination of law by the Supreme Court and a remittal for further hearing to this court. If amendments could be permitted following the disposal of each segment of a case where such are taken separately, as had occurred by agreement here, there might no end to an ever increasing appetite to seek amendments at every stage of the proceedings, a development whereby the court process would become quite unworkable.
Mr. Feeney referred to the decision in Doylle v C & D Providers (Wexford) Limited [1994]3 I.R. 57 as perhaps the only case where an application to make amendments of substance was made after a judicial determination of the facts. In that case, the plaintiff had brought proceedings in the Circuit Court by way of civil bill which were dismissed on the basis that the action was statute barred. The plaintiff appealed to the High Court and at the hearing of the appeal in the High Court applied for the first time to amend the civil bill to incorporate an allegation of fraud on the part of the defendants.
O'Hanlon J., in dismissing the appeal and refusing the plaintiff's application to amend the endorsement of claim, held that the amendment sought should not be allowed when the proceedings had come to a conclusion in the Circuit Court and a decision had been given by the learned Circuit Court judge. He further held that the amendment was sought in reliance of evidence given on behalf of the defendant in the Circuit Court which could have been obtained at an earlier stage by the delivery of interrogatories and that the application should have been made at an earlier stage. Finally, he held that the fact that the plaintiff, through no fault of his own, was unaware of the defendants alleged breach of contract until after the period of limitation had expired did not prevent the claim from becoming statute barred.
In the course of his judgment, he stated as follows (at p. 60):
"After hearing submissions from counsel representing both parties I concluded that I should not allow the desired amendment at that stage. In his affidavit the plaintiff stated that he was at all times anxious that fraud should be pleaded in the civil bill but was dissuaded from taking this course by legal advice to the effect that the necessary evidence was not available to sustain the plea and that it would be wrong to putforward such a serious allegation without substantial grounds for considering that it was well founded.
It appeared to me, however, the only basis upon which the plaintiff sought amendment of the civil bill at the very late stage when an appeal to the High Court was about to commence, was in reliance on evidence given on behalf of the defendant in the Circuit Court (which was by no means conclusive in deciding the issue in favour of the plaintiff) and that such evidence could have been obtained at a much earlier stage by delivery of interrogatories, having regard to the plaintiff's anxiety to introduce the plea of fraud into his proceedings.
In these circumstances, I concluded that the amendment sought should not be allowed, when the proceedings had been allowed to continue to a conclusion before the learned Circuit Court judge, and his decision on the claim had been given. "
Mr. Feeney submits that all the considerations which form the basis of the judgment delivered by O'Hanlon J. are present in the instant case. The amendments currently sought are expressly acknowledged as being sought in reliance of evidence given on behalf of the defendants in the High Court. It is clear, Mr. Feeney submitted, that such evidence could have been obtained at an earlier stage by the delivery of interrogatories.
Mr. Feeney also referred to the following passage in Delaney and McGrath's `Civil Procedure in the Superior Courts at p. 132:
"More recent cases have emphasised that the court enjoys a wide discretion under Order 28 which may be exercised to refuse to grant leave to amend not only because of prejudice but also on the basis of the conduct of the applicant as where he has delayed in bringing the application and/or has failed to provide a satisfactory explanation for the failure to plead the matter in the first instance. "
Mr. Feeney submitted that the applicant from 1993 onwards was certainly aware of facts, acknowledged to exist by the defendants from 1995, sufficient to advance all the claims which he now wishes to make. Whether or not he had the material to substantiate those claims was a separate consideration not germane to what the court must consider. That consideration was an evidential and different consideration.
There had been huge delay in the instant case, Mr. Feeney submitted, and the explanation offered for inaction was patently wrong having regard to what was stated by plaintiff's counsel in opening the case to this court at the commencement of the hearing in 1999 when he claimed the investigation was by way of `subterfuge' and that the evidence would `prove' a hidden agenda. (Day 1 pp. 117, 133).
Mr. Feeney also referred to Wildgust v Bank of Ireland and to the following observation of McGuinness J. on late applications to amend made at p. 39 of her judgment when she stated:
"While no one would suggest that amendment of pleadings in mid-trial is normally a desirable practice or should frequently be permitted, it was open to the trial judge in the instant case to take that course. "
Mr. Feeney submitted that this observation may be taken as underlining the extreme undesirability of granting applications to amend either at or during a trial and even more so following judgment. In effect, the amendments now being sought, he submitted, are being sought at a point in time some 9 years after the requisite knowledge became available to the applicant. Mr. Feeney further submitted that any infirmities in the respondents position arising from any alleged non-disclosure of a hidden agenda could be fully explored at the trial.
CONCLUSION
In discussion with counsel in the course of his submissions, Mr. Hayden candidly stated that the real purpose of the present application was to ensure that the pleadings were as comprehensive as possible prior to the second part of the hearing and to ensure that the applicant would not be hindered by objections that any particular aspect of the case had not been fully and comprehensively pleaded. In other words, the application is acknowledged to be, in part at least, a `belt and braces' exercise.
It is important to stress that the totality of the applicant's claim is to be gathered not merely from the points of claim as originally delivered, but also from the defence and counter claim delivered on his behalf.
In that counter claim, the applicant alleges that the Law Society exercised and discharged its functions wrongfully and unlawfully and claims damages not confined to loss and damage suffered by him as a result, but including also damages for personal injuries and special damage, preliminary particulars of which were furnished in the counter claim. No issue is being taken by the Law Society on the entitlement of the applicant to seek damages in respect of these various headings of claim, nor is it suggested that further particulars of alleged personal injury or special damage cannot now be furnished.
I fully accept and adopt the reasoning of O'Hanlon J. in Doyle v. C & D Providers (Wexford) Limited and apply it to the instant case. Moreover, when a case is heard in modules or consecutive parts, the findings produced at the conclusion of one part of the hearing cannot, it seems to me, without grave risk of injustice and uncertainty, be utilised and relied upon to seek amendments to pleadings for the next part. Amendment seeking on an incremental basis at each stage in the process would make the litigation process unworkable. Neither plaintiff or defendant would ever know or be certain of the case he had to meet. Putting it simply, it seems to me basic that the findings of the court should not be a platform for further claims in the same proceedings. This is quite a different situation from one where new and previously undiscoverable information comes to light either prior to or during the course of a single hearing which may, even at a late stage, compel the court to exercise its discretion.
Further, I accept the submission made on behalf of the respondents that the applicant had sufficient knowledge to plead his case at the time of the initial hearing in the High Court and well before it. I am not satisfied that the explanation offered provides any sort of excuse or justification for amending the pleadings at this stage.
The proposed additional claims of trespass, trespass to goods, detinue and the like are, it seems to me, no more than highly particularised offshoots of the various headings of the plaintiff's claim already pleaded which are sought now to be detailed in a prolix and in my view quite unnecessary sequence of proposed amendments. I see no injustice to either party in allowing the matter proceed to finality on the existing pleadings subject to the qualification that the applicant may of course furnish additional particulars of personal injury, loss and damage, as in any other case.
I therefore refuse the relief sought in the notice of motion herein.
