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Court considers where the balance of justice lies in dismissing claims for delay
PRACTICE AREA GROUP: Commercial Litigation and Dispute Resolution
A recent decision(1) has usefully synthesised the principles applicable to dismissing claims for delay, which in this case had been brought by the seventh defendant. The decision also clarifies that the courts will engage in a case-by-case analysis of where the balance of justice lies, in terms of whether to allow a plaintiff to continue its claim or whether a defendant should not be obliged to defend proceedings which are not progressed with sufficient expedition.
The plaintiff purchased an apartment, in respect of which the seventh defendant (who had been retained as the structural and civil engineer on the development) had attested to the development's compliance with building regulations. However, the apartment had issues with cracked walls, ongoing water ingress and other continuing problems. The developer – the first defendant in the proceedings – had undertaken some remedial work in the development over the years, but went into liquidation in 2009. Before liquidation, proceedings relating to the defects had been issued in December 2007 and were served in October 2008. The seventh defendant entered an appearance in November 2008 and requested delivery of a statement of claim. However, no steps were taken by the plaintiff until May 2010, when a notice of intention to proceed was filed. The notice was not served until August 2011. In February 2012 the plaintiff's solicitors indicated that the statement of claim was being finalised and was ultimately delivered in May 2014. Ten months later, the seventh defendant issued a motion to dismiss the proceedings on the basis of inordinate and inexcusable delay with regard to the institution and prosecution of the proceedings. He contended that a fair trial was impossible, and that it was unfair and unjust to require him to address issues which had arisen so far in the past. He referenced the liquidation of the developer and suggested that his own papers "may not be complete", which vague assertion the court found to be weak.
The seventh defendant's motion was founded on three aspects of delay:
• pre-action delay;
• delay in serving the summons; and
• delay in serving the statement of claim.
Although the seventh defendant's involvement in the development ended in 2000, the plaintiff bought her apartment only in 2002 and proceedings issued in late 2007. The court concluded that although this was close to the expiry of the limitation period, the plaintiff was entitled to act until the last day of that period.
Delay in serving summons
The rules provided that, once issued, a summons has an initial lifespan of one year within which to be served. The court ruled that the 10-month delay was still within the one-year period and there was no basis to foreshorten that. Accordingly, the plaintiff did not act unreasonably or improperly.
Delay in serving statement of claim
The statement of claim was delivered almost five and a half years after first being requested, notwithstanding interim correspondence. Although the court was critical of the seventh defendant for not issuing his motion until a further 10 months had elapsed, it held that the delay was inordinate and inexcusable.
However, the court felt that it was necessary to consider whether the balance of justice lay in the plaintiff's favour. Before doing so, it set out principles on applications to dismiss proceedings for delay in list form by reference to prior authorities.
The court noted that the law should be considered within the "penumbra of the constitutional right of access to the courts to defend and vindicate one's legal entitlements" and went on to recite(2) the following key principles:
"(1) The court has an inherent jurisdiction to dismiss a claim on grounds of culpable delay when the interests of justice require it to do so.
(2) The rationale behind the jurisdiction to dismiss a claim on grounds of inordinate and inexcusable delay is that the ability of the court to find out what really happened is progressively reduced as time goes on, putting justice to hazard.
(3) It must in the first instance be established by the party seeking dismissal of proceedings for want of prosecution on the ground of delay in the prosecution thereof, that the delay was inordinate and inexcusable.
(4) In considering whether or not the delay has been inordinate or inexcusable the court may have regard to any significant delay prior to the issue of the proceedings. Lateness in issuance creates an obligation to proceed with expedition thereafter.
(5) Even when delay has been inordinate and inexcusable the court must exercise a judgment on whether, in its discretion, on the facts, the balance of justice is in favour of or against the case proceeding.
(6) Relevant to the last issue is the conduct of the defendant and the extent to which it might be considered to have been guilty of delay, to have acquiesced in the plaintiff's delay or implicitly encouraged the plaintiff to incur further expense in pursuing the claim. Delay in this context must be culpable delay.
(7) The jurisdiction to dismiss proceedings on grounds that, due to the passage of time but without culpable delay on the part of the plaintiff, a fair trial is no longer possible, is a distinct jurisdiction in which there is a more onerous requirement to show prejudice on the part of the defendant, amounting to a real risk of an unfair trial or an unjust result.
(8) In culpable delay cases the defendant does not have to establish prejudice to the point that it faces a significant risk of an unfair trial. Once a defendant establishes inordinate and inexcusable delay, it can urge the court to dismiss the proceedings having regard to a whole range of factors, including relatively modest prejudice arising from that delay.
(9) Prejudice to the defendant may arise in many ways and be other than that merely caused by the delay, including damage to the defendant's reputation and business.
(10) All else being equal, persons against whom serious allegations are made that affect their professional standing should not have to wait over a decade before being afforded opportunity to clear their name.
(11) The courts are obliged under Article 6(1) of the European Convention on Human Rights to ensure that all proceedings, including civil proceedings are concluded within a reasonable time. Any court dealing with an application to dismiss a claim on the grounds of delay must be vigilant and factor into its considerations, not only its own constitutional obligations but the State's Convention obligations.
(12) The courts must make it clear that there will not be an excessive indulgence of delay, because, if they do not, they encourage delay, leading to breach by the State of its Convention obligations.
(13) There is a constitutional imperative to bring to an end a culture of delay in litigation so as to ensure the effective administration of justice and basic fairness of procedures. There should be no culture of endless indulgence. (The court notes this is not the same as saying that there can be no indulgence).
(14) The courts can bring to their assessment of any (if any) culpability in delay the fact that the cost of litigation may act as a disincentive to prompt action.
(15) As in every case, the courts must bring to their considerations a necessary sensitivity to the personal and social background of persons who present before them."(3)
Taking these principles into account, the court felt that the balance of justice lay in favour of allowing the plaintiff to continue her claim, although she should do so with the greatest despatch possible. The court noted that she had numerous problems with her apartment and had faced significant difficulties in trying to get them fixed, including difficulties in litigating. Against that:
"[the] apparent nonchalance that the [seventh defendant] has manifested as to whether or not he does in fact have the papers necessary to defend these proceedings, and the slow pace with which he came to court with the within application, do not suggest him to be an individual whom the balance of justice favours when weighed against the wrongs that are alleged to have been done to [the plaintiff]."(4)
While the decision is necessarily one where the underlying facts were significant to the outcome in terms of the balance of justice, the court set out a clear recitation of the underlying principles relating to delay. A litigant should look ordinarily to progress its case with expedition. However, it is also clear that this obligation applies not only to a plaintiff in advancing the substantive dispute, but also to a defendant when deciding to issue a motion to dismiss proceedings for inordinate and inexcusable delay. In addition, a party should be as specific as possible in framing any prejudice suffered which arises from the claimed delay.
(1) Farrell v Arborlane Ltd  IEHC 535.
(2) For each principle, the court also identified the authorities for each proposition (Paragraph 31).
(3) Paragraph 30.
(4) Paragraph 35.
This article first appeared in the International Law Office Litigation newsletter, 06 October 2015.