Superwood Holdings PLC v. Sun Alliance and London Insurance plc (No.2) [1998] IESC 15; [1999] 4 IR 531 (21st July, 1998)

JUDGMENT of the Chief Justice delivered on the 21st day of July, 1998, (O’Flaherty and Murphy JJ concurring): (2) 1. This is an appeal brought by the above named Appellants against the judgment of the High Court, Smyth J., delivered on the 15th day of May 1998 and the order of the High Court made in pursuance thereof dismissing the application made on behalf of the Plaintiffs for an order extending the time for acceptance of a lodgment made in these proceedings by the fourth named Respondent in the title hereof (hereinafter referred to as Lloyds). 2. The background to this case is set forth in detail in the judgment of Mrs. Justice Denham delivered on the 27th day of June 1995 and as stated by her:- “The case arises as a result of afire on the Plaintiffs’ premises after which they sought to recover compensation under policies of insurance for indemnity for consequential loss. The Defendants repudiated the contracts on the grounds of fraud. Thereafter, this case took on an enormous momentum of its own, including the not infrequent hallmarks of a ‘fraud’ case involving as it did a lengthy hearing, a mountain of paperwork, and a collection of circumstantial evidence. (3) The case was at hearing for 116 days before the High Court, the judgment runs to 423 pages and the transcripts of that trial alone number in excess of 8,500 pages. The High Court dismissed the Plaintiffs’ action, and the Plaintiffs appealed to this Court where the hearing of the appeal lasted 16 days. By order dated the 27th day of June 1995, this Court allowed the appeal brought by the Appellants herein and ordered that the judgment and order of the High Court be set aside. The Supreme Court further ordered that the matter be remitted to the High Court to determine what were the Plaintiffs’ losses arising after the fire at their premises at Bray on the 26th day of October 1987 and what percentage of these losses were attributable to the fire and such other matters as are relevant and in issue. It is now necessary to set forth in detail the proceedings in the High Court subsequent to the aforesaid order of the Supreme Court. By notice of motion dated the 13th day of June 1996, the Appellants herein applied to the High Court for directions and the first, second and third named Respondents by notice of motion dated the 10th day of July 1996 sought (4) liberty from the Court to deal directly with the receiver of the Plaintiff Companies. These two motions were heard in the High Court and by order dated the 16th day of July 1996 the High Court adjourned the motion brought by the first, second and third named Respondents, generally with liberty to re-enter and on the motion brought by the Appellants herein it was ordered:- 1. that the loss suffered by the Plaintiffs arising out of the fire at their premises at Bray on the 26th day of October 1987 be determined by reference to the statement of claim delivered on the 24th day of November 1988 50 as to determine the amounts payable to the Plaintiffs under the terms of the insurance policies, the subject matter of these proceedings; 2. that on determination of the losses set out in the said Statement of Claim the Court do determine what percentage of the losses are attributable to the fire; 3. that the issues referred to at (1) and (2) above should be placed in the list to fix dates on Thursday, 25th July with priority; 4. that immediately upon the determination of the said issues set out in (1) and (2) above or as soon as practicable thereafter the Court do determine (5) what further damages the Plaintiffs are entitled to pursuant to the order of the Supreme Court dated 27th day of June 1995; 5. that the parties hereto be at liberty to seek further and better discovery in due course in respect of the issues set out at paragraph (4) hereof notwithstanding that discovery of documents relating to the issues set out at paragraph (1) hereof is complete. The next relevant step taken in the High Court was that by notice of motion dated 25th October 1996, the first, second and third named Respondents applied to the High Court pursuant to the provisions of Order 22 Rule 1(a) of the Rules of the Superior Courts to lodge in court a sum of money in satisfaction of the Appellants claim herein. By order dated the 12th day of November 1996, the High Court (Smyth J.) ordered that the first, second and third named Defendants be at liberty to lodge in court a sum of money against all claims of all the Plaintiffs so however that the elements of the lodgment are indicated by reference to paragraphs (1), (2) and (4) of the order of the High Court dated the 16th day of July 1996 and subject to the conditions therein set forth. (6) The said order granted leave to the fourth named Defendant to lodge, if so advised, on identical terms of the first, second and third named Defendants. The Appellants herein appealed to this Court against the terms of the said order of the High Court made on the 12th day of November 1996 which said appeal was dismissed by this Court on the basis that the trial judge was in charge of the case and this Court would not interfere with his discretion in such matter and the order of the High Court was varied by adding three days to each of the dates specified in the said order in relation to such lodgment and to acceptances thereof. In pursuance of the said order the first, second and third named Respondents lodged in court the sum therein set forth by reference to paragraphs (1), (2) and (4) as required by the High Court order dated the 16th July 1996. On the 19th day of November 1996, the fourth named Defendant paid into court a sum of money and by letter of that date specified that the breakdown of the money lodged in Court in respect of issues (1) and (2) and (4) of the Order of the High Court dated the 16th July 1996. (7) It appears from a letter written by the trial judge on the 18th of November 1996 that he directed the trial of an issued raised by the fourth named Respondent herein on the 12th November 1996 which issue was stated to be that:- “That the trial when begun proceed on the basis of the evidence adduced at the original trial before O‘Hanlon J and that no new evidence be permitted to be adduced on the assessment of damages as are referred to in the order of the President of the High Court of the 26th June 1996, in particular paragraphs (1), (2) and (4) thereof.” 3. This matter came before the Court on the 19th November 1996 and it was ordered that the Plaintiffs (Appellants herein) do issue and serve on the Defendants (Respondents herein) on or before Friday, 22nd day of November, 1996 a notice of motion for leave to adduce further and/or fresh evidence herein which motion was to be returnable for the 25th November 1996. 4. On the 25th November 1996, the High Court found that the parties hereto are not estopped from adducing further and/or new evidence in relation to the assessment of damages to be made herein and ordered that:- (8) “the assessment of damages to be had herein pursuant to the said order of the Supreme Court dated the 27th day of June 1995 be heard by way of a retrial - the Court (i) having regard to the findings of fact made by Mr. Justice O'Hanlon as summarised at pages 16 to 19 inclusive in the judgment of Mrs. Justice Denham and (ii) abiding by the said order of the Supreme Court.” 5. Further orders were made by the High Court (Smyth J.) on the 10th day and the 11th day of December 1996. 6. In pursuance of the order made by Smyth J. on the 25th November 1996 the Appellants herein caused to be issued a motion dated the 21st February 1997 seeking leave to adduce further and fresh evidence as per the order of the 25th November 1996; this motion was heard on the 12th and 13th days of March 1997 and on that date the learned trial judge made an order which cited to his ruling made on the 11th day of March 1997 that the insured plaintiffs may pursue a claim a claim on contract and/or negligence and that the uninsured Plaintiffs may pursue a claim in negligence ordered that (9) (1) that the insured plaintiffs be at liberty to adduce evidence referable to a claim in contract and/or negligence and that the uninsured plaintiffs be at liberty to adduce evidence limited to a claim in negligence; (2) that the evidence of Richard Bunyon, Peter Lyons and Billy Davis be adduced in that order prior to hearing a case in negligence and that said witnesses be at liberty to adduce evidence concerning matters up to the date of receivership specifically as to the effect if any of the receipt of sums in ranges from £100,000 up to £2 million in increments of £100,000 on quarter days commencing 1 st March 1988 and ending 1 st March 1989. On that date he also made orders for discovery. 7. The first, second and third named Respondents delivered an amended defence on the 19th November 1996 and the fourth named Respondent delivered an amended defence on the 10th January 1997. 8. I base this summary of the orders and rulings made by the learned trial judge on the documents set forth in the Book of Pleadings submitted on behalf of the Appellants. (10) 9. In addition, the Court has been informed that the case has been in progress for 88 days, 55 of which have been devoted to the cross examination of Mr. Bunyon, which said cross examination is not yet complete. 10. As appears from the order dated the 13th March 1997 the learned trial judge differentiated between what he described as “the insured Plaintiffs” and “the uninsured Plaintiffs” . 11. As appears from the Policies handed in to the Court, during the course of the hearing of the appeal, the “insured plaintiffs” are Superwood Ltd., Superwood Exports Ltd., Superchip Ltd, and Superwood Holdings Plc. 12. Superwood International Ltd. and Superwood (U. K.) Limited are “uninsured plaintiffs” . 13. While Superwood Ltd., Superwood Exports Ltd., Superchip Ltd. and, Superwood Holdings Plc, are entitled to maintain a claim for damages for both breach of contract and/or negligence, Superwood (U. K.) Ltd. and Superwood International Ltd. are limited to a claim for damages for negligence. 14. The contract of insurance entered into by Lloyds is a separate contract to that entered into by the first, second and third named Respondents and appears (11) to be only with Superwood Ltd. Superchip Ltd., and Superwood Exports Ltd. and does not appear to include Superwood Holdings Plc. 15. As between the four Respondents liability on foot of the policies would appear to be Sun Alliance Insurance Group 30% Prudential Assurance Company Ltd. 20% Church and General Insurance Co. Ltd. 10% Lloyds 40% 16. I have referred to the aforesaid orders of the High Court made by the learned trial judge for the purpose of illustrating his involvement in and familiarity with all the issues in this complicated case which, at the time of the making of the order, the subject matter of the appeal herein, was, and still is, at hearing before him. 17. During the course of the hearing of the original action by the Appellants herein and the appeal from the judgment of the High Court, the Respondents herein were not separately represented but, as appears from the judgment of the (12) learned trial judge, at some stage in 1996 Lloyds sought and were granted separate representation. 18. As stated by the learned trial judge:- “This fact was objected to on more than one occasion by Counsel for the Plaintiffs on the basis that the Defences were identical and the Plaintiffs were being put unfairly and unnecessarily to additional costs and expense and that the claims of the Plaintiffs were in respect of the same damage and that the claims and the causes of action and damages were inextricably linked or interlocked.” 19. However, it would appear that the granting of such separate representation has resulted in a settlement of the Appellant Companies claims in these proceedings, in so far as they relate to Lloyds, the fourth named Respondents herein. 20. While the Court has not been informed of the terms of the settlement, it would appear that it was a term of same that the money lodged in Court by Lloyds pursuant to the order of the High Court made on the 12th day of November, 1996 be paid out to the Appellants. (13) 21. By Notice of Motion dated the 28th day of April 1998 addressed to and served on the Solicitors for the first, second and third-named and the Solicitors for Lloyds the Appellants sought:- “1. An order extending the time for the acceptance by the Plaintiffs of the amount lodged in Court herein by the fourth-named Defendants on the 19th day of November, 1996.” 22. The said application was expressed to be grounded on “the notice of lodgment of the fourth-named Defendants dated the 19th day of November, 1996 and the Certificate of Funds, the nature of the case and the reasons to be offered.” 23. The application was not grounded on any affidavit and was heard by the learned trial judge on the 5th, 8th and 12th days of May 1998. 24. The application was supported by Counsel for Lloyds and opposed by Counsel for the first, second and third-named Respondents. (14) 25. By order dated the 15th day of May, 1998 the Appellants application was refused for the reasons set forth by him in the course of his judgment on that date. 26. The Appellants have appealed to this Court against the said Order. As this Order was an order made by the learned trial judge in the course of an action at hearing before him - an obviously complicated action involving claims for damages on behalf of six Plaintiff Companies against four Defendant Insurers and at this stage at hearing far in excess of 80 days - the first question for consideration by this Court is whether this Court should at this stage entertain an appeal against the refusal by the learned trial judge to grant the application made on behalf of the Appellants. 27. This Court has on many occasions indicated its disapproval of appeals to this Court against orders made by a trial judge during the course of hearing an action. 28. The strongest indication of such disapproval is to be found in Condon . v. Minister for Labour [1981] IR page 62 and in particular in the judgment of Kenny J. with which O’Higgins C. J. and Parke J. agreed. 29. At page 74 of the Report, Kenny J. stated:- (15) “When the plaintiffs’ action came on for trial on the 27th July, 1976, the judge allowed the issue as to whether the statement of claim disclosed a cause of action to be argued as a preliminary issue. The judge decided to reject the defendants’ argument on that issue and they then applied for an adjournment to enable them to appeal to this Court. That application was resisted by the plaintiffs’ counsel but the judge adjourned the trial. The defendants then appealed to this Court. It was admitted by counsel for the defendants that the statement of claim disclosed an existing cause of action at the date it was filed. The procedure which was adopted of allowing the defendants an adjournment to enable them to appeal to this Court was grossly irregular: the preliminary point was never set down for argument as a preliminary point, and no rule of court has been cited which justified the course taken. When the judge decided against the defendants’ preliminary submission, is proper course was to continue with the hearing. Although I strongly disapprove of the course which was taken and consider that we could dispose of the appeal on that ground alone, the substantive point is of such importance that I think that we should decide it.” (16) 30. It is clear from a consideration of the judgment in that case, which concerned the validity having regard to the terms of the Constitution of the “Regulation of Banks (Remuneration and Conditions of Employment) (Temporary Provisions) Act, 1975” , that the Court considered it to be “grossly irregular” to bring an appeal to the Supreme Court against a ruling of the High Court made in the course of proceedings before it and expressed strong disapproval of the course adopted in that case. 31. The judgment went so far as to state that the Court could dispose of the appeal on that ground alone but did not do so because of the importance of the issues involved in the case. 32. I am satisfied that this case provides ample authority for the proposition that appeals should not be made to this Court against orders or rulings made by a trial judge during the course of an action being tried by him or her. 33. It is, however, submitted on behalf of the Appellants herein that the ruling made by the learned trial judge in this case was not made during the course of the proceedings being heard by him because, by virtue of the agreement reached between the Appellants and Lloyds all proceedings against (17) 34. Lloyds were at an end and all that was required to implement the settlement, which brought about this happy conclusion, was that the Appellants be granted an extension of time for the purpose of accepting the lodgment made by them in Court. 35. The learned trial judge, however, considered that there were still outstanding issues in the case which involved the first, second and third-named Defendants, including the costs of various interlocutory applications and the costs of the proceedings and in effect that the claims and causes of action and damages were inextricably linked or interlocked. 36. At the conclusion of his judgment the learned trial judge stated:- “I have no evidence upon which I can grant the relief sought. Furthermore, I am not in a position to deal with the whole costs of the action. Accordingly, I dismiss the Application...” 37. It is clear from the judgment of the learned trial judge that he considered that the provisions of Order 22 Rule 12 of the Rules of the Superior Courts applied to the circumstances of this application. Indeed it had been submitted (18) to him by counsel for the first, second and third named Defendants ‘that Order 22 Rule 12...is imperative in its application’. 38. Order 22 Rule 12 provides that:- “Money may be paid into Court under this Order by one or more of several defendants sued jointly or in the alternative upon notice to the other defendant or defendants. If the Plaintiff elects within the time limited by this Order to accept the money paid into Court, he shall give notice as in Rule 4 mentioned to each defendant and thereupon all further proceedings in the action or in respect of the specified cause or causes of action (as the case may be) shall be stayed and the money shall not be paid out except in pursuance of an order of the Court dealing with the whole costs of the action or causes of action (as the case may be).” 39. It is clear from a consideration of the terms of this rule that it applies, and can apply, only in the circumstances set forth in the said rule, viz. 1. The money is paid into Court by one or more several defendants sued jointly or in the alternative, (19) 2. is accepted on the basis that all further proceedings in the action or in respect of the specified cause or causes of action (as the case may be) shall be stayed, and 3. the Court is in a position to deal with the whole costs of the action, there being no question of the Action continuing against the remaining Defendants. 40. That is not the position in this case. 41. Whilst it is unfortunate that the application made in this case was not grounded on an affidavit disclosing the relevant facts, it is clear from the judgment of the learned trial judge that the Appellants (the Plaintiffs in the action) have settled all aspects of their claim against Lloyds pursuant to an agreement made between them which agreement contained a “confidentiality clause” and what was described as ‘a side agreement’ which dealt with ‘issues arising out of the Civil Liability Act’, but no settlement was reached in respect of the claim against the other defendants. The agreement obviously provided for the payment out to the Appellants of the money lodged in Court by Lloyds as an integral part of the settlement. (20) 42. The provisions of the ‘side agreement’ were made available to counsel for the first, second and third named who objected to the learned trial judge being informed of its contents and who declined to receive the document. 43. It is also clear from the judgment that the learned trial judge accepted that the agreement provided that there should not be any order for costs as between the Appellants herein and Lloyds. 44. The first, second and third named Respondents do not, and indeed could not, challenge the right of Lloyds to settle the claim brought against them by the Appellants herein and to refrain from further participation in these proceedings but object to the payment out to the Appellants of the monies lodged in Court by Lloyds in satisfaction of the portion of the Appellants’ claim against them. 45. These Respondents relied on the provisions of Order 22 Rule 12 of the Rules of the Superior Courts to support their submission that the monies lodged in Court by Lloyds could not be paid out to the Appellants unless and until the costs of the action are dealt with by the trial judge. (21) 46. The application does not fall under that rule or the precise terms of any other provision of Order 22 aforesaid. However, the reality of the matter is that the lodgment was made by Lloyds who have compromised the claim made by the Plaintiffs on terms which include the payment out to the Plaintiffs of the monies so lodged. Whether the compromise involves the Plaintiffs retaining all of those monies or those monies plus additional funds or refunding some part thereof to Lloyds I do not know. But what can be said with confidence is that the Plaintiffs and Lloyds are the only parties to the proceedings who have any possible proprietorial interest in the monies lodged in Court. The other Defendants have not got, or identified any circumstances in which they might obtain, any interest whatever in those monies. In those circumstances and in the absence of any conflicting interest I believe that the monies lodged in Court should be dealt with by the learned High Court Judge in such manner as the Plaintiffs and Lloyds have directed. 47. I am further satisfied that the proceedings in this case so far as they relate to the claim by the Appellants against Lloyds have been finally determined by virtue of the agreement between them and without derogating in any way from the proposition enunciated in the earlier portion of this judgment viz. that appeals should not be made to this Court against orders or rulings made by a trial judge during the course of an action being tried by him or her, I am (22) satisfied in the particular and unique circumstances of this case, the relevant proceedings between the Appellants and Lloyds having been finally determined, this Court is entitled to deal with the matters raised in this appeal. 48. I am further satisfied that there is no rule of law, nor do the interests of justice require, that there should be any impediment to the implementation of a desired settlement of even portion of these long protracted proceedings. 49. Consequently I would allow the appeal. © 1998 Irish Supreme Court BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII