Another case of “Don’t Look Up”? – 13-year-old proceedings dismissed for delay

In a recent decision of Mr. Justice Rory Mulcahy in Coughlan & Anor v. Stokes & Ors [1], High Court proceedings issued in April 2011 were dismissed for want of prosecution as against the Third and Fourth Defendants to those proceedings. The decision is another reminder for plaintiffs to “just look up” and prosecute their claims with expedition, rather than dealing with the potentially wide-reaching effects of those claims being dismissed for delay. Ricky Kelly, Partner and Hilda Mannix, Senior Associate, both of RDJ LLP’s Dispute Resolution team, advised the successful Third and Fourth Defendants.

Background

The substance of the Plaintiffs’ claim in the plenary proceedings (the “Proceedings”) related to a claim for specific performance of a settlement agreement reached in May 2009 (the “Settlement Agreement”), pursuant to which two earlier sets of proceedings had been compromised. Those earlier proceedings, which were consolidated by Order dated 10 December 2007, concerned allegations that an escape of water from the Defendants’ premises caused damage to the Plaintiffs’ premises at City Limits Comedy and Night Club in Cork City. Those two sets of proceedings comprised (i) proceedings issued in 2003 by the Plaintiffs as against the First and Second Defendants alleging water damage to their property owned by the First Defendant at 22 St Patrick’s Hill, Cork (the “Property”) and (ii) proceedings issued in 2006 by the Plaintiffs as against the Fifth Defendant. The Third and Fourth Defendants purchased the Property in January 2004 and were joined to the Proceedings in December 2006. The First Defendant provided the Third and Fourth Defendants with an indemnity in respect of any damages, costs and expenses arising out of the 2003 proceedings and a further indemnity in similar terms was provided by the First Defendant by letter dated 13 February 2009.

The Settlement Agreement required each of the Defendants to carry out certain works and the Plaintiffs’ complaint in the Proceedings as against the Third and Fourth Defendants related to the effectiveness of the works carried out by them pursuant to the Settlement Agreement. The Plaintiffs did not seriously contest that there had been inordinate delay in prosecuting the Proceedings and there was no explanation at all provided for the vast majority of the delay. The main issue in dispute between the parties was whether, in light of the inordinate and inexcusable delay, the balance of justice favoured dismissing the Proceedings.

Pleadings Chronology

Before considering that issue, Judge Mulcahy gave a detailed procedural history of the Proceedings and a summary of same is set out in the table below:

The Test for Delay

Mr. Justice Mulcahy affirmed the approach set down in Primor plc v Stokes Kennedy Crowley [2], commonly known as the Primor test. The three limbs to the Primor test are as follows:

1. Has there been inordinate delay?
2. If so, is the delay inexcusable?
3. If the delay is inordinate and inexcusable, does the balance of justice favour the claim being dismissed?

The Court also examined more recent case law in which this test has been applied, namely Gibbons v N6 (Construction) Ltd [3] and Cave Projects Ltd v Kelly [4]. Mr. Justice Collins in Cave noted that the onus was on a defendant to establish all three limbs of the Primor test and that an order dismissing a claim was “a far reaching one”, a “very serious remedy” and “an option of last resort”.

Application of the Primor test

The Court then went on to consider the facts of the instant case as against the three limbs to the Primor test. Its findings are set below.

1. Has there been inordinate delay?

On the facts, the Plaintiffs did not seriously dispute that the delay was inordinate in circumstances where the Proceedings were extant for over twelve years. The Court noted that this was an “appropriate concession”, in circumstances where there were two periods of three years in which no progress at all was made in the Proceedings. It further noted that even if there were complexities associated with the case (which were not identified or apparent here), such delays would still be inordinate.

The Court also placed significance on the Proceedings involving an alleged breach of a settlement agreement, which meant that the parties and scope of their obligations were clearly identifiable and a history of litigation existed between them. Mr. Justice Mulcahy was of the view that this ought to have facilitated the prosecution of the Proceedings with expedition and not a “dilatory approach”. Indeed, the Court opined that there was a greater onus to move with expedition where a party is seeking to enforce a compromise of earlier proceedings. In particular, the public policy of the Court encouraging settlement of disputes would be undermined if settlement led to further disputes which are not thereafter prosecuted with diligence.

2. Is the delay inexcusable?

Moving on to the second limb of the Primor test, Mr. Justice Mulcahy found that “where the plaintiffs have provided no explanation at all for the lion’s share of the delay in bringing these proceedings to trial, the delay must prima facie be regarded as inexcusable.”

It was acknowledged that the Third and Fourth Defendants were responsible for some minor delay at the outset of the Proceedings, such as the delay in entering their Appearance until a little over a year after the Plenary Summons issued, and a further delay in delivering their Defence, albeit the Court accepted that this must be seen in the context of the Plaintiffs not having delivered their Statement of Claim.

The Court noted that there was no progress made in the Proceedings between the Plaintiffs setting the matter down for trial in March 2014 and their discovery request in August 2017, and that no explanation was given for this period of inaction. The Plaintiffs submitted that the Third and Fourth Defendants were partially responsible for this delay by reason of their alleged failure to fully engage with correspondence about a joint inspection, albeit that correspondence was not in evidence. However, this argument was not accepted by the Court, given the significant lapse of time during that period.

The Court accepted that the period between the request for discovery in August 2017 and the completion of the exchanges of discovery by November 2018 was not in itself inordinate. However, there was a further period of three and a half years before the next step was taken in the Proceedings, namely the delivery of a notice for particulars in May 2022. The Court formed the view that this delay was “all the more egregious having regard to the length of time that the proceedings had been in being by then and the previous unexplained period of inactivity.” While the Court found that there was no culpable delay on the Plaintiffs’ part after May 2022, it was of the view that the overall delay in progressing the Proceedings, and in particular, the periods between March 2014 and August 2017 and November 2018 and May 2022, was unexplained and inexcusable.

3. Does the balance of justice favour the claim being dismissed?

Turning to the third limb, Mr. Justice Mulcahy took the view that the authorities show that the starting point for that assessment was that the Proceedings are ones in which the Plaintiffs were guilty of inordinate and inexcusable delay. Further, a Defendant seeking to have proceedings dismissed for delay must be able to point to some prejudice arising from the delay, albeit that prejudice need not be confined to prejudice defending the proceedings. It is not essential to point to a specific prejudice, but any general prejudice [5] relied upon should be examined closely.

The Third and Fourth Defendants in this case pointed to a number of matters which gave rise to specific prejudice, namely:

• the First Defendant entered into a Personal Insolvency Arrangement (“PIA”) in 2015 which included any liability under the indemnities provided to the Third and Fourth Defendants in 2004 and 2009. They argued that the Plaintiffs’ delay deprived them of the benefit of relying on those indemnities. They also argued that the PIA would deprive them of the benefit of relying on the Notice of Indemnity and Contribution served on the First Defendant in March 2014. The Court accepted that it was arguable that the language used in the indemnity was sufficiently broad to cover any damages, costs and expenses arising out of the Settlement Agreement. Moreover, the PIA was entered into more than a year after the Proceedings were set down for trial by the Plaintiffs, therefore the prejudice suffered is clearly referrable to the Plaintiffs’ culpable delay. The Court rejected that there was prejudice established in relation to the Notice of Indemnity and Contribution.
• they purchased the Property as an investment, they have not been able to sell the Property and they have had difficulty obtaining insurance on the Property. However, these were only held to be “slight” prejudices in the absence of detailed evidence before the Court;
• the Plaintiffs have commenced three sets of separate proceedings against other parties for loss and damage associated with water egress which would render the Proceedings more complicated to bring to trial and resolve. This was held by the Court to be general prejudice, where there was no evidence before the Court as to the potential impact of the other proceedings on the instant case;
• more generally, there is an inevitable prejudice in defending a claim relating to an allegation that works carried out more than a decade before were not in accordance with the Settlement Agreement, particularly where an expert would be required to examine and give a view on those historical works.

Balance of justice tipped in favour of Third and Fourth Defendants

Mr. Justice Mulcahy was satisfied that the prejudice to the Third and Fourth Defendants which was attributable to the Plaintiffs’ culpable delay tipped the balance of justice in favour of the Proceedings being dismissed. This was particularly in circumstances where the Plaintiffs had already secured judgment in respect of the First and Fifth Defendants and have a “variety of other proceedings” against separate parties relating to the alleged water damage. He was further satisfied that any acquiescence alleged by the Plaintiffs as against the Third and Fourth Defendants was not such as to deprive them of the relief sought. In particular, the Court was of the view that the Third and Fourth Defendants’ engagement in the discovery process did not prejudice their position such that the Plaintiffs were lulled into a particularly burdensome or expensive discovery exercise to the extent as that experienced by the Plaintiff in Primor.

Conclusion

The decision is a useful analysis of the long-standing Primor test, particularly having regard to the third limb of that test. While there was no real contest as to the inordinate nature of the delay in this case, it is clear that the application of the third limb of the Primor test very much depends on the facts of any particular case, which reinforces the discretionary nature of the Court’s jurisdiction. That said, the decision is in line with the more general trend that the courts are becoming increasingly critical of litigants who delay the prosecution of their claim.

[1] [2024] IEHC 133

[2] [1996] 2 IR 459

[3] [2022] IECA 112

[4] [2022] IECA 245

[5] For example, general prejudice might be the difficulty that witnesses may have in giving evidence and/or the difficulty the court might have in determining conflicting evidence relating to events that may have taken place many years before a trial.