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High Court of Ireland Decisions |
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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> James Elliott Construction Ltd -v- Lagan & ors [2015] IEHC 480 (14 July 2015) URL: http://www.bailii.org/ie/cases/IEHC/2015/H480.html Cite as: [2015] IEHC 480 |
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Judgment
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Neutral Citation [2015] IEHC 480 THE HIGH COURT COMMERICAL [2014 No. 2229 P.] BETWEEN JAMES ELLIOTT CONSTRUCTION LIMITED PLAINTIFF AND
KEVIN LAGAN, TERRY LAGAN, JOHN GALLAGHER, IRISH ASPHALT LIMITED & LAGAN HOLDINGS LIMITED DEFENDANTS JUDGMENT of Ms. Justice Costello delivered 14th day of July, 2015 1. These proceedings concern a claim for damages for deceit against the defendants in the context of the sale of crush rock products by the fourth named defendant, Irish Asphalt Limited (“IAL”), to the plaintiff. The plaintiff seeks damages for deceit together with a declaration that the plaintiff is entitled to be indemnified by the defendants in respect of any damages that the plaintiff may be held liable to pay or may reasonably pay out of claims arising from the use of the fourth named defendant’s products by the plaintiff in a number of construction projects. 2. The defendants brought motions seeking to compel the plaintiff to reply to notices for particulars raised on their behalf. I delivered a judgment on 20th November, 2014, and on 3rd December, 2014, ordered that certain particulars were to be delivered. The plaintiff delivered replies to the particulars ordered and the defendants say that the plaintiff has failed to reply properly to the particulars which were ordered to be provided on 3rd December, 2014. They brought motions seeking various reliefs including a strike out of the proceedings due to the failure to provide the particulars in accordance with the Order of 3rd December, 2014. In the first instance they were seeking orders from the Court directing the plaintiff to comply with the existing Court Orders and furnished the particulars sought and that the Court would adjourn the motions for a period of time to ascertain whether or not the plaintiff properly replied to the particulars. At this point they were not seeking to strike out any part of the pleadings. This judgment should be read in the light of my prior judgment delivered on 20th November, 2014. Motion of first, second, third and fifth named defendants
5.3 In making an allowance in favour of Bravofly it is, however, important that I point out that there is already in being a court order requiring the relevant particulars to be delivered. It does not seem to me to be appropriate to re-visit that issue at this stage.”
(b) They say the quantum of the claim remains inadequately particularised. (c) The applications and locations of where Clause 804 or 3 Inch Down were used in the developments, set out in the Schedule to the Statement of Claim and in respect of which the plaintiff seeks all indemnity from the defendants remain inadequately particularised. Particular 5.5
This ‘knowledge of the raw material’ goes beyond the basic test suite listed in a product specification. There is an obligation on the quarry operator to know all the relevant characteristics, including chemical, mineralogical and physical/mechanical properties of the quarry source rock.” 10. These defendants claim that this is a totally inappropriate reply to a specific request for particulars. They especially take issue with reliance on quotes from the judgment in the case of James Elliott Construction Limited v. Irish Asphalt Limited as being a wholly inappropriate way in which to provide particulars in this case. I accept that a considerable portion of the replies to particulars consists of narrative, much of which is not directly relevant to answering the particular posed. 11. However, I am satisfied that the plaintiff has identified what the minimum test standards are and that these defendants understand the whole panoply of tests which must be satisfied before rock can be considered to meet the requirements of Clause 804 or 3 Inch Down. On the other hand, the plaintiff has not specified how the rock failed to comply with these requirements and has not furnished details of the tests or standards which it says were failed and so has not replied adequately to part of this particular. Particular 9.2 12. In relation to particular 9.2, the plaintiff was directed to provide particulars of how the rock at the quarry at Bay Lane which was described as argillaceous rock with excessive disseminated pyrite did not comply with the provisions of the NRA testing regime or the European testing regime. The plaintiff has given particulars of the tests which it says were failed. These defendants state that they need to know what are the alleged minimum standards described by the NRA or the European requirements. 13. It is pleaded in para. 24 of the Statement of Claim that Clause 804 is defined by the NRA as a material that can pass a specific set of tests described by European standards (as is referenced in IS EN 13242:2002). It is pleaded that this is the only definition of Clause 804 and the onus is on the supplier to ensure conformity with the standard tests prior to offering for sale products purporting to meet such standards. I accept the plaintiff’s submission that adequate particulars had been furnished in this regard and that these defendants know and understand the case they have to meet. In the circumstances, I do not accept that there has been a failure to reply adequately to particular 9.2. Particular 14.3 14. This particular arises out of para. 28(a) of the Statement of Claim which is headed “Particulars of Deceit by IAL”. It reads as follows:-
The plaintiff has indicated to the Defendants its intention to seek inspection from this Honourable Court pursuant to Order 50, r.4 RSC so that it can obtain rock samples from Bay Lane, if the Fourth Named Defendant does not consent to such inspection and sampling. When the results of this testing is received, the Defendants will know with further specificity precisely how the rock fell short of the required tests.” 17. The plaintiff was ordered to reply to the particulars prior to any discovery in the case and therefore, this part of the reply to particular 14.3 cannot be an answer to the question as to whether this particular has been adequately answered to date. It must be assessed in the light of the answer actually furnished. 18. This answer states that the aggregate produced from the rock at Bay Lane was low grade because it failed to meet the minimum requirements of all of the following test procedures which were then listed in some considerable detail. That is the case which the plaintiff wishes to advance. It is not for the defendants to ask which of these many tests the plaintiff says was failed. The plaintiff has clearly stated that its case is that all of these tests were failed. It is not specified why each of these tests had been failed. The particular has adequately been replied to in respect of what tests were failed but not as regard to why the tests are alleged to have been failed. Particular 30.1 19. The particular raised at 30.1 related to the quantum of the plaintiff’s claim. The plaintiff was directed to give full particulars of all loss suffered to date including the nature of the loss and the amount of the loss and when the loss was incurred. In its reply the plaintiff said the losses suffered had not yet been quantified but said that they came under the following headings:
• Loss of profit. • Losses incurred due to premature disposal of plant and equipment. • Reinvestment of Sillogue 4 claims amount and contractors excess in pyrite remediation. • Reinvestment of monies received to date on foot of Ballymun Youth Facility proceedings in dealing with pyrite. • Estimated losses associated with Ballymun Regeneration Limited over and above loan. • Losses suffered to date are also reflected in the plaintiff’s taking of a loan from Ballymun Regeneration Limited. 20. In a further reply dated 13th February, 2015, the plaintiff estimated the losses of the ability to pre-qualify for construction work as being in the region of €12million. It is said that this is the estimate of a cost of acquiring a debt free construction company with zero asset value that would have the ability to pre-qualify for contracts and generate profitable work, which ability the plaintiff had lost as a result of the pyrite crisis. It also claimed there was a reduction in the net asset value of the plaintiff between 31st January, 2008, and 31st January, 2014, amounting to €10,609,046.00. It is said the plaintiff needs to engage an expert to properly quantify its claim to a loss of profits caused as a result of the pyrite crisis. It indicates that no such expert has presently been engaged. It estimates that losses incurred due to premature disposal of plant and equipment to be in the region of €1million. 21. It is clear from the terms of the replies, this is not in any sense a detailed statement of the losses alleged to have been suffered by the plaintiff to date. Despite the fact that these proceedings were nearly two years in preparation and they were admitted into the Commercial Court by an Order of 24th March, 2014, as of February, 2015, the plaintiff has not engaged in an expert to assist in quantifying part of its claim. The plaintiff indicated that it was of the view that the question of the calculation of damages would arise later in the case and, by inference, that it believed that there would be a modular trial and the issue of damages would be left over all issues of liability have been determined. While this may indeed be an appropriate manner to proceed in this case, this suggestion was never maintained when the original Motion was argued before me. I accept that this particular has not been properly replied to and, in effect, the plaintiff seeks to postpone its obligations to provide the particulars the subject of the Order of 3rd December, 2014. Particular 8.3 22. In particular 8.3, these defendants requested the plaintiff to properly particularise where, by reference to each project in the Schedule to the Statement of Claim, each of Clause 804 and 3 Inch Down had been used. In the reply to particulars, the plaintiff stated that Clause 804 and 3 Inch Down were used in each of the projects. In respect of 14 of the 16 projects, Clause 804 and 3 Inch Down was used, inter alia, on the following applications:
• site works; • drainage; and • site services, car parks, roads and footpaths, filling in foundations and rising walls. 24. I accept that the reply does not differeniate between where Clause 804 is used or 3 Inch Down is used, or whether they are both used together. However, the plaintiff has offered to provide these defendants with the drawings in respect of each of the projects indicating the materials specified by the project engineer. It is to be borne in mind that this information relates to the plaintiff’s claim for an indemnity in respect of future losses which it anticipates it will suffer in the light of damage which it is anticipated will arise in these projects from pyritic heave. It should not, therefore, be necessary for these defendants to analyse the entirety of each of the 16 projects to ascertain where precisely each of the products was employed. If claims arise out of any of the 16 projects, the information necessary to ascertain whether the particular damage arose in an area or location where Clause 804 and/or 3 Inch Down was used should be ascertainable from these plan, specifications and drawings. To ask the plaintiff at this stage in the proceedings to provide greater further particularity than has been provided by the combination of the answer and the offer of the drawings for inspection is unnecessary and oppressive in order for the plaintiff to particularise its case and these defendants to understand it. This particular has, in the circumstances, been adequately replied to. Particular 23.1 25. The last category of reply which these defendants challenged was particular 23.1 which provided particulars of the deceit alleged against these defendants. 26. This arises out of para. 28(c) of the Statement of Claim which states as follows:-
The Plaintiff also alleges that each of the First, Second and Third Named Defendants was aware of the results of tests conducted on the ‘Lansdowne site’ [a related site] 9as referred to in the Statement of Claim), which tests were carried out in 1983, 1998, 1999 and 2001. In light of the results of these tests… these Defendants knew that Bay Lane was not suitable to provide Clause 804 or 3 inch down… The First, Second and Third Named Defendants were also aware of the findings of a published 1988 paper by Jones et al to the effect that dominant rock in the Bay Lane area was mudstone.” 28. From the above, it is clear that while the plaintiff has been at pains to emphasise the awareness and knowledge of these test results by the first, second and third named defendants, it nowhere actually identifies any test result. The one exception is the reply at 23.1.10 where the plaintiff says that the first, second and third named defendants were aware of the results of environmental testing from in or around 2005 on discharge water from the quarry which showed excess sulphate concentrations. The plaintiff stated that they would provide further particulars after discovery. However, the order was to provide these particulars as they related to the plaintiff’s allegation that these defendants knew of test results performed on the rock and yet authorised fraudulent misrepresentations. 29. The plaintiff in the course of its reply also indicate that:-
The [plaintiff] specifically refers to the testing on core samples taken by GWP in 1999. What was stated to be the results of those tests on core samples is not compatible with a summary of the 2007 Quarry Face sample testing which tested rock samples from around the full perimeter of the Bay Lane Quarry and confirmed that all samples tested failed at least 2 of the basic Clause 804 tests. Further, the stated tests on core samples are also incompatible with the extensive testing carried out by the Plaintiff’s experts on aggregate supplied from Bay Lane and presented at previous court proceedings.” Motion of the fourth named defendant Particular 42 32. At particular 42, the plaintiff was requested to provide particulars of the dates upon which the plaintiff alleged that the material quarried and produced by IAL at Bay Lane failed specified industry standard acceptance tests and/or criteria and how the material is alleged to have failed those tests. The reply of 14th January, 2015, stated:-
(a) In 1995 the results of a geophysical survey at the site by BMA indicated the rock to be argillaceous and unlikely to be suitable as a construction aggregate. (b) In 2000 when the rock core from Bay Lane was tested. (c) From 2003 onwards, the crushed rock produced at Bay Lane would have failed the relevant testing (if carried out).” 34. The reply goes on to state:-
36. Particulars of the deceit which is the core of the claim are to be found in para. 28 of the Statement of Claim. On balance, in my opinion, the fourth named defendant had not been furnished with adequate particulars to understand the case it has to meet and to defend the case. The answer to the request to identify precisely how the material is alleged to have failed the standard industry tests has not been answered other than in a generic way. Particular 43 37. At particular 43, the plaintiff was directed to provide full and detailed particulars of the results of all tests carried out and which it is alleged the material consistently failed. The answer referred the defendant to the reply to particular 42 and 51. Particular 51 was directed towards the knowledge of the defendant in the context of an allegation that it fraudulently misrepresented the quality of the product or was reckless as to whether the representation was true or false. In replies furnished before the Order of 3rd December, 2014, it had identified some tests which it alleged the material failed to satisfy, namely the total sulphur, magnesium sulphate, soundness and (prior to May, 2004) 10% fines value. It specified that the minimum soluble sulphate content should have been less than 0.2% and the total sulphur content should have been less than 1.0%. As these were said to be non-exhaustive and examples of where the rock from Bay Lane quarry failed to meet the relevant standards, the plaintiff was directed to provide further and better particulars as sought. In reply up to the particular as ordered, the plaintiff said the test results had not been provided to date but will be sought through the discovery process. They state that the only independently sampled and tested samples of Bay Lane aggregate carried out on behalf of customers during the production at Bay Lane (and the plaintiff’s knowledge) were dated 2006 and were reported in the Menolly transcripts (a reference to a different trial) the test results were presented in detail in the Menolly transcripts on days 87 and 123. The plaintiff says that they identified the standards and the precise results of which they presently are aware. They have pointed to the existence of other results and alerted the defendants to the fact that they do not accept the rest results in evidence in the case James Elliott Construction Limited v. Irish Asphalt Limited. It is as comprehensive answer as they can provide at this stage of the proceedings. 38. The fourth named defendant argues that on its face and in substance this does not and cannot amount to a reply to the particulars sought. I accept this submission. I also accept the submission of counsel for the plaintiff that the plaintiff has gone as far as it can go based on its current state of knowledge in the replies it has furnished to date. However, it is pleaded in the Statement of Claim that the aggregate quarried at Bay Lane consistently failed industry standard accepted tests for Clause 804 and/or the criteria for 3 Inch Down. Having made that plea, I directed that the fourth named defendant was entitled to a reply to the particular raised. In my judgment, despite the lengthy recitation of evidence which the plaintiff will no doubt seek to lead at trial in this regard, it has not, in fact, adequately answered the particular raised. Particular 55 39. At particular 55, the plaintiff was ordered to provide full and detailed particulars of the material facts by which it is alleged the fourth named defendant knew (from investigations conducted prior to the alleged representations) that the quality of rock at Bay Lane was low grade and particulars of the precise test(s) and the minimum test standards for an unbound aggregate that it is alleged rock must fail in order to be considered “low grade”. The reply to this request was as follows:-
41. The plaintiff says that it has provided adequate replies to this particular. It has specified certain pre-2003 tests and no real issue has been taken with that by the fourth named defendant. It says that post 2003 tests are relevant as the representation continued for the duration of the supply of material to the industry as Clause 804 and/or 3 Inch Down. Whether the fourth named defendant is correct in its objection, nonetheless, the plaintiff has provided the information which it will rely upon when it seeks to advance its case at trial and has replied to the particular raised in relation to the dates of the tests concerned. 42. The plaintiff was also asked to identify the precise tests and the minimum test standards for an unbound aggregate rock that it is alleged rock must fail in order to be considered to be low grade. The answer referred to replies to two other requests for particulars which detailed the tests and minimum test standards applicable to the two products. The fourth named defendant complained that these were not particulars directed towards the results of tests but rather towards the applicable tests and therefore did not provide an answer to the question raised. The particular asked the plaintiff to state the minimum test standards for an unbound aggregate that the plaintiff alleges rock must fail in order to be considered low grade I am satisfied in the circumstances that this particular has been properly replied to and that the thrust of the complaint of the fourth named defendant in truth relates to the substance of the reply rather than the adequacy of the reply. Particular 69 43. At particular 69, the plaintiff was directed to provide full and detailed particulars of the material facts upon which the plaintiff intended to rely in support of the allegation that the fourth named defendant knew that product placed on the market by it would lead to serious structural damage to buildings in which it was used and:-
(ii) Please identify the provisions of the European Standard alleged to impose on aggregate suppliers the responsibility to establish total sulphur and acid soluble sulphate contents of construction aggregates. (iii) Is it alleged that pre-quarry development testing was not carried out by the Fourth Defendant? If so, please identify the precise test(s) the Fourth Defendant should have carried out. (iv) Is it alleged that production testing on aggregate was not carried out by the Fourth Defendant? If so, please identify the precise test(s) the Fourth Defendant should have carried out.” 45. In answer to the four subparagraphs of this particular, they state:-
(ii) IS EN13242:2002 • Section 6 NSAI S.R. 21:2004 • Section 2.4 • Section 3.4 • Annex A • Annex B • Annex C • Annex D (iii) Refer to the tests set out in particular 18 above. (iv) The allegation is that if production testing was carried out then it was not done properly or it was done properly and the results were disregarded. For production testing for the supply of Clause 804 and 3 Inch Down, refer to the list of tests in particular 41 above. The replies to be provided after discovery at 53, 54, 87 and 89 will also be relevant here.” 47. The plaintiff says that it does not have the result of the tests which were undertaken on behalf of Lagan but it has referred the fourth named defendant to the Menolly proceedings and the test results given in evidence on three days of hearing. In the circumstances, where the plaintiff does not have the copy of the fourth named defendant’s own test results and the plaintiff makes specific references to the results as discussed in a transcript in a case in which the fourth named defendant was a party, I believe that the fourth named defendant has received adequate information in reply to particulars in this instance to know and understand the case it has to meet, albeit that it has been provided to it in a somewhat unorthodox fashion. In accepting the adequacy of this reply I am not to be taken as holding in general that a reply to particulars referring to an opponent’s own information and a transcript of evidence in a separate case in which the litigant was not a party is a proper or appropriate way to reply to a request for particulars, whether or not a court has ordered the reply to the particular in question. The plaintiff has clearly indicated that after discovery it will provide particulars presumably in a more orthodox fashion. However, insofar as the test I should apply at this stage is whether or not adequate information has been given to the fourth named defendant by the plaintiff of the plaintiff’s case, I am satisfied in relation to (i) that this is so. 48. In sub-paragraphs (iii) and (iv), the fourth named defendant asked the plaintiff whether it was alleged that testing was not carried out either prior to the development of the quarry or during production. It is the fourth named defendant who framed the particular in that way. The plaintiff replied in the alternative as it maintained that it did not and could not know whether the tests were actually conducted and the results ignored or no relevant or appropriate tests were conducted at all. I have accepted that the plaintiff is entitled to advance its case in this way prior to discovery. I have also accepted that it is entitled to postpone giving particulars of pleas where it makes its case in this way until after discovery given the nature of the claim in fraud and deceit. Simply because the fourth named defendant asked in a request for particulars for the plaintiff to specify whether or not it is alleging that certain tests were or were not conducted, it cannot thereby force the plaintiff into making a case it did not seek to advance and which was not pleaded by it in the first place and which I have held they may postpone (selecting between either of the two alleged alternatives) until after discovery. In the circumstances, I refuse to direct that the plaintiff provide further replies to this particular, 69. Particular 72 49. At para. 28(d) of the Statement of Claim, the plaintiff pleaded that it was known at the time that rock containing disseminated pyrite could not or should not be used in Clause 804 and/or 3 Inch Down and as a minimum required more detailed investigation and specific testing as recommended in writing by GWP. The fourth named defendant asked for particulars concerning the basis for the alleged belief. In reply, the plaintiff referred to the fact that sulphates in soil and aggregate are damaging to concrete and that GWP had advised the fourth named defendant to undertake specific testing to further evaluate the suitability of the rock for the manufacture of aggregate. Arising out of this reply, the fourth named defendant asked the plaintiff to identify:-
(ii) Please identify the specific testing alleged to have been advised by GWP. (iii) Is it alleged that such test(s) were not carried out by the Fourth Defendant?”
52. In reply to (iii), the plaintiff states that the tests were:-
• Tests for general properties of aggregates - procedure and terminology for simplified petrographic description • Tests for chemical properties of aggregates and soils
total sulphur and water soluble sulphate.” 54. The plaintiff says that in reply to (ii) they have quoted from the Mr. Geoffrey Walton document which stated that testing as to durability of selected samples was required in addition to the usual binding, stripping and strength testing. As the particular relates to what was recommended by Mr. Walton and this is a quote from his document, I am satisfied that this particular has been adequately replied to. Insofar as there may be a lack of particularity in the answer, it is attributable to the original document prepared by Mr. Walton and not to the replies furnished by the plaintiff. 55. In relation to (iii), the plaintiff had responded to the request for particulars raised by the fourth named defendant in the alternative. For the reasons set out in dealing with the reply furnished in relation to particular 69 I am satisfied that the plaintiff is entitled to reply in the alternative to this particular but that it must give further particulars of its allegations after the discovery is furnished in this case. Particular 88 56. In para. 28(h) of the Statement of Claim, it was pleaded:-
57. The fourth named defendant accepted the reply to particular 84 as an answer to that query. It does not accept that it is an appropriate reply to particular 88. It says it is confusing as this makes no distinction between preproduction and production systems and regimes. 58. In reply, the plaintiff says, in essence, there was no distinction between particular 84 and particular 88. The fourth named defendant asked the plaintiff to make a distinction between the appropriate regime for preproduction for a quarry and the appropriate regime and system for when a quarry is in production. If it is the plaintiff’s case that they are the same, then they should be clarified. If the plaintiff says that there is a distinction, then the differences between the two should be fairly stated. While the plaintiff may say that the matter is clear, the fact that particular 88 is replied to by reference to particular 84 allows for scope for confusion in this regard. In the circumstances, I believe it is appropriate to clarify the distinction (if any). Particular 93 59. The final particular that the fourth named defendant claims was not adequately answered in accordance with the order of the court was number 93. In para. 28(h) of the Statement of Claim, the plaintiff pleads:-
60. In reply, the plaintiff stated:-
62. In submissions, the plaintiff stated that it could identify the customers (as it had previously) but it did not have the test results and therefore could not furnish the replies as directed until after discovery and possibly third party discovery. It, therefore, accepts that this particular has not been replied to at this stage in the proceedings. Conclusion |
