Background
The proceedings relate to the conversion of a former hotel into student accommodation in South County Dublin. The plaintiffs argued that significant remediation works were required. They claimed this was necessary after it was discovered that the works did not comply with fire safety standards.
The plaintiffs, adopting what is a standard approach, issued proceedings against not just the designers and main contractor, but each of the project’s sub-contractors. The plaintiffs did so in reliance on the collateral warranties that had been provided by these sub-contractors. One of the sub-contractors involved was the moving party, Deane Roofing & Cladding Ltd (Deane Roofing).
The claim received specified numerous fire stopping and safety defects. Deane Roofing contacted the plaintiffs’ solicitor. It pointed out that their appointment to the project was solely to install the roof. It argued that it was not required to integrate their external roof works with fire safety systems.
Since Deane Roofing's work was not related to the issues mentioned in the claim letter, it asked the plaintiffs to withdraw the claims made against it. This request was denied by the plaintiffs who invited Deane Roofing to an inspection of the works. At the inspection, no defects associated with Deane Roofing scope of works were shown. As a result, Deane Roofing again sought a release from the proceedings. This was once again denied.
Deane Roofing brought an application seeking to have the proceedings against it struck out. It did so in accordance with two separate mechanisms.
- Under the Court’s inherent jurisdiction to strike out proceedings as:
- The plaintiffs’ case was bound to fail, and
- The plaintiffs’ claim was frivolous and vexatious.
- An application in under Order 19, Rule 28 of the Rules of the Superior Courts (RSC) as:
- The plaintiffs had failed to disclose a reasonable cause of action.
Strike Out Application
In its Grounding Affidavit, Deane Roofing highlighted that the plaintiffs’ had pleaded that Deane Roofing was responsible for the supply and installation of the Cladding roofing system used on the Project in Phase One. The plaintiffs did not plead any further involvement on Deane Roofing’s part in Phases Two or Three where fire stopping would have been implemented. Deane Roofing questioned the nature of the defects in a Notice for Particulars to which the plaintiffs responded that Deane Roofing were not responsible for the majority of defects.
The plaintiffs’ only plea that placed potential responsibility on Deane Roofing’s part was regarding the integration of the roof system into the fire compartment walls. Deane Roofing repleaded that this was not part of its scope of works. This was evidenced by an expert’s opinion. In any event, the collateral warranty given to the plaintiffs by Deane Roofing was for their work on the roof cladding only.
The plaintiffs, who were still engaged in the review of the discovery documents furnished by Deane Roofing, did not submit a Replying Affidavit.
Judgment
Mr Justice Simons pointed out the unusual aspects of the case. Specifically, he noted the plaintiffs’ lack of a reply to the evidence put forward by Deane Roofing.
The Court went on to state that the primary focus in these applications was an assessment of whether the proceedings before it represented an abuse of process. The Court emphasised that it was not enough to simply determine that the plaintiff's case was weak. It was necessary to find that no cause of action had been presented and that the plaintiffs’ case was bound to fail.
The Court explained the difference between using its inherent jurisdiction to dismiss a case and using its power under Order 19 RSC. Where an application is made to strike out under the Court’s inherent jurisdiction, a Court must engage in a limited form of assessment of the merits of the case. If a defendant can establish that there is no credible basis for the facts as presented, then the proceedings can be struck out as an abuse of process.
The Court then discussed the facts before it and the evidential burden upon the plaintiffs. The Court stated that it was Deane Roofing’s position that, once it had presented Affidavit evidence that it had no responsibility for the defective works, there was then an obligation upon the plaintiffs to engage with that evidence.
The Court noted the ruling in GE Capital Woodchester Ltd v. Aktiv Capital[1]. In GE Capital, the Court found that mere assertions are insufficient and that Affidavit evidence is usually required to counter opposing facts presented. This was not, however, a rule to be applied strictly. It may be possible to establish a credible basis by suggesting that witnesses will be available at trial to speak to the facts of the case . Alternatively, you may convince the Court that the true nature of the case will only be established through the discovery process.
Applying those factors, the Court noted that the plaintiffs had only become owners of the building in question several years after the construction project had been completed. The Court accepted the plaintiffs were therefore not yet certain of the allocation of liability amongst the various sub-contractors. The plaintiffs had sought discovery for this precise reason and were entitled to review the results of that process.
The Court noted that Deane Roofing had not argued that the fire safety measures in the building were not, in fact, defective or that remedial works were not required. Also of importance was that the Deane Roofing scope of works as pleaded by both Deane Roofing and the main contractor differed. As the scope of works was in dispute, the plaintiffs were entitled to review the discovery documents to establish the precise position as regards liability.
Similarly, the Court decided that it was irrelevant that the Plaintiffs had not produced their own evidence to counter the Deane Roofing arguments. The evidential burden in strike out applications is only shifted to the Plaintiffs in limited circumstances.
Ruling
The Court found that it was not in a position to strike out the proceedings as an abuse of process. It also determined that it could not summarily dismiss the proceedings where issues remained to be resolved.
The Court noted that it could not agree that the plaintiffs had no credible basis to continue their case. However, it advised the plaintiffs to reconsider the strength of their arguments after the discovery process was completed. A clear indication of the Court’s scepticism of the plaintiffs’ case was that it did not allocate the costs of the motion in the normal manner, to the successful party. The Court instead directed that the costs of the motion should follow the eventual decision at trial. This was because Deane Roofing should not be exposed to costs in the event that it should not have been joined to the proceedings in the first instance.
Conclusion
It is quite an unsatisfactory ruling for parties engaged in multi-party construction litigation when it is not apparent where liability may lie or when a plaintiff’s complaints appear unrelated to the work or services provided by a defendant.
The Court’s ruling is instructive in highlighting the difficulty faced by a defendant in seeking to have proceedings dismissed as an abuse of process. The Court’s ruling indicated that the timing of such an application would be an important factor. It emphasised the significance of allowing the plaintiffs the opportunity to clarify circumstances via the discovery process. However, it is not clear whether the ruling would have been different if no relevant evidence was discovered following the exchange of discovery.
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[1] GE Capital Woodchester Ltd v. Aktiv Capital [2009] IEHC 512.
