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THE SUPREME COURT Appeal No. 196/04
Murray C.J.
Denham J.
McGuinness J.
Geoghegan J.
Fennelly J.
BETWEEN/
WALTER CROKE
Plaintiff/Appellant
and
WATERFORD CRYSTAL LIMITED
AND IRISH PENSIONS TRUST LIMITED
Respondents/Respondents
JUDGMENT of Mr. Justice Geoghegan delivered the 26th November 2004
INTRODUCTION
This is an appeal brought by the above named plaintiff/appellant on a single notice of appeal from two orders made by the High Court (Smyth J.) on the 20th April, 2004 in two respective interlocutory motions brought by the said appellant in this action. One of the orders of the High Court was an order refusing leave to the appellant to make certain amendments to his Statement of Claim as against both respondents. The other order of the High Court was a refusal of an application by the appellant to be given liberty to deliver and file a Reply to the respective defences of the first and second-named respondents notwithstanding that the time for doing so had long expired.
I should mention at the outset that the title which I have assigned to this judgment is not identical to the title on the notice of appeal. The notice of appeal instead of naming Walter Croke only as the plaintiff and appellant has inserted the following “Walter Croke & Others, Plaintiffs/Appellants”. As this case is one of a large batch of similar cases it seems probable that the legal advisers to the appellant deliberately entitled the notice of appeal in that way so that in some fashion it could be said that the decision of this court bound the other actions. It appears to me, however, that the insertion of the words “& Others” in the notice of appeal was wholly unjustified and wrong having regard to the fact that the two motions the subject matter of this appeal were both brought and headed in one action only, that of Walter Croke. Accordingly, I have thought it appropriate to alter the title of the appeal.
For a proper understanding of the substantive issues in this appeal, it is necessary to outline some further procedural context. This action of the appellant is one of approximately 350 separate actions brought against the respondents by former employees of the first-named respondent who took voluntary redundancy from the first-named respondent for the most part in the early 1990s. It has been suggested on behalf of the respondents that (with a few exceptions) they are essentially what might be described as copycat actions brought after some similar actions by other employees had been settled. Be that as it may, these actions have to be heard and determined at some stage and there was naturally anxiety on all sides that they be suitably managed so that the real issues could be heard and determined in a practical fashion. The appellant and the respondents had different ideas as to what form that management should take. All the parties brought motions for directions which were also heard in the High Court by Smyth J. The respondents’ respective motions were directed towards certain preliminary issues being set down for separate trial. Without going into too much detail, the preliminary issues which the respondents sought to be heard were essentially the issues relating to statute bar and issues as to whether they would have to meet at all claims for fraud, deceit, fraudulent breach of trust and fraudulent misrepresentation on the grounds that these claims were allegedly unsustainable, bound to fail, frivolous and vexatious an abuse of the process of the court and that at any rate the pleadings failed to disclose any such causes of action.
Essentially, the High Court acceded to the respondents’ motions and the appellant appealed to this court from that order in Appeal No. 312/03. The main ground of the appeal was that the learned High Court judge had erred in directing the trial of a preliminary issue where there was a full dispute on the facts and where no affidavits of discovery had been filed.
This appeal came on for hearing before this court on the 16th February, 2004. At the hearing, the court learned that following on the order of Smyth J. the two motions the subject matter of this appeal had been brought in the High Court and had come on for hearing before Finnegan P. who had taken the view that he ought not to deal with them pending the hearing of the earlier appeal to this court from the directions as to a preliminary issue given by Smyth J. This court, however, took the opposite view in that it decided that it was pointless to consider the correctness or otherwise of the directions given by Smyth J. when it was not finally determined whether the Statement of Claim was going to be substantially amended and whether a Reply was going to be delivered to each of the defences. It will be self-evident as to why this court took that view when I explain the nature of the amendments sought in the Statement of Claim and the contents of the proposed Replies to be delivered.
For reasons which will become obvious, it is appropriate that I should first deal with the motions seeking amendments of the Statement of Claim. Before I analyse what the proposed amendments are and what the effect of them is, it is important that I should examine the existing unamended Plenary Summons and Statement of Claim and establish what are the precise causes of action pleaded at present as against each respondent.
Existing pleadings as against first-named respondent
The general endorsement of claim on the Plenary Summons is confined (apart from Courts Act interest and costs) to a damages claim for eight different causes of action. These are deceit, “fraud and/or fraudulent breach of trust”, fraudulent misrepresentation, breach of duty, breach of fiduciary duty, negligent misstatement, breach of statutory duty and breach of contract. Claims for damages for each of these eight causes of action in the same wording and the same order constitute the prayer in the Statement of Claim. Apparently, these claims have been made in most but not, I think, all the actions even though it is not conceded that the relevant facts are the same in each case. No differentiation is made as between the two respondents in either the Plenary Summons or the prayer part of the Statement of Claim. It is trite law that a cause of action merely mentioned by name in the prayer does not and cannot in any sense constitute the pleading of such cause of action. It is, therefore, necessary to look at the main body of the Statement of Claim. It is important that I should do so separately in relation to each respondent.
Starting with the first-named respondent, paragraph 5 explains that at all material times there was a pension scheme which had been instigated by that respondent for the benefit of its employees and, therefore, including the plaintiff who was such an employee. The paragraph goes on to say that the pension scheme was constituted by a declaration of trust made by the second-named respondent, as amended, and a subscriber’s agreement form executed by both respondents and that at all material times the second-named respondent was the sole trustee of the pension scheme while the day to day administration was the joint responsibility of both respondents. No cause of action of any kind is pleaded in that particular paragraph.
Paragraph 6 goes on to explain that as part of a process of rationalising its operations and reducing the number of employees, the first-named respondent made available to its employees voluntary redundancy packages.
Paragraph 7 sets out that the appellant made enquiries in relation to the possibility of his ceasing his employment with the first-named respondent and accepting a voluntary redundancy package and that it was allegedly represented to him by a servant or agent of the first-named respondent that the only options available to the appellant were to either accept the voluntary redundancy package which was offered to him or to refuse it and that if he was to refuse the voluntary redundancy package he would be transferred to a different section of the first-named respondent’s undertaking where he would earn considerably less than he had been accustomed to earning.
Paragraph 8 pleads that at the time of the making of these representations, the first-named respondent intended and well knew that the appellant would rely thereon and would be induced thereby to accept the voluntary redundancy package which he was being offered and would accept a net refund of his contributions to the pension scheme thereby losing any rights which he had acquired under the said scheme. I would just pause there in order to signpost what seems to be some kind of plea or certainly more than a hint, of deliberate misconduct on the part of the first-named respondent even if the word “fraud” or an equivalent word is not expressly used.
The Statement of Claim goes on to plead that the appellant relied on the representations and received a lump sum payment which included a repayment of the contributions made by him to the pension scheme less a percentage deduction to take account of income tax, but that he had since discovered and that the fact allegedly was that the representations were untrue in that at the material time, the appellant allegedly had acquired valuable pension rights under the scheme and that there were a number of options open to him including the transfer of the value of his interest in the scheme to some other pension scheme approved by the Revenue Commissioners or opting for a deferred pension payable from age sixty-five based under the level of contributions made by him. The appellant then pleads that had these options been communicated to him he would have opted for the deferred pension.
In paragraph 12 it is stated that the first-named respondent “being the party responsible for the instigation and day to day administration of the pension scheme and/or by reason of the implied terms of the plaintiff’s contract of employment and/or by reason of its relationship and proximity to the plaintiff owed duties to the plaintiff.” The paragraph goes on to list six such duties. Essentially, they were all related to duties to ensure that the appellant knew what he was at and had proper advice. Paragraph 13 pleads the breaches of these duties. These are for the most part couched in negative terms that is to say, they are particular omissions but one of them reads as follows:
“Pressurise the plaintiff into accepting the said voluntary redundancy package without allowing him sufficient opportunity to investigate the merits of same.”
Paragraph 14 makes an express allegation of deliberate concealment from the appellant of his potential entitlements and the paragraph further alleges that the representations made by the first-named respondent through its servants or agents to the appellant were made “with the intention of concealing these options from the plaintiff and deceiving him and did so deceive him.” There is no doubt that there is an allegation of deceit and, therefore, fraud in that paragraph. There is also an allegation of fraudulent concealment which might not of itself be a cause of action but presumably would be directed towards a potential plea of the Statute of Limitations.
Proposed amendments as against first-named respondent
That is the case made against the first-named respondent. It is now necessary to examine the proposed amendments to the Statement of Claim.
An amendment has been made to paragraph 8 which in so far as it concerns the first-named respondent is not very material. It seems to be merely an attempt to state more accurately what he was told he would receive if he took redundancy.
Paragraph 10 contains a significant amendment in that the effect of it would be to claim that the discovery of the alleged untruth of the representations was learnt in or around 1999 whereas in its original form the Statement of Claim did not give any date. It also strengthens the claim of misrepresentation in that it expressly alleges that the alleged untruths were known to be such by the first-named respondent at the time they were made. The date of discovery of the alleged untruth in so far as it is sought to be included in the Statement of Claim is not essential in that it is more importantly a matter to be included in the Reply. Nevertheless it is a clarifying amendment. I would also comment that the original Statement of Claim when read as a whole certainly insinuated that the first-named respondent knew the representations to be untrue. Further proposed amendments are in paragraph 11 but they are really only expansions of what is already alleged. There is a new and lengthy paragraph 12A in which it is alleged that the first-named respondent, its servants or agents acting in concert with the second-named respondent were guilty of fraud and/or fraudulent breach of trust and/or fraudulent misrepresentation and/or deceit and/or dishonesty and/or conspiracy. There are then detailed particulars of these allegations. Apart from the allegation of acting in concert with the second-named respondent there is nothing particularly new in the proposed paragraph 12A The same is true of the amendments to paragraph 13. Fundamentally, the same basic allegations of deliberate inducement to the appellant to take the redundancy terms and the deliberate concealment of his alleged entitlements are made. However, there is one change. Again, it is in connection with the bringing in of the second-named respondent. In the proposed amendment to paragraph 13 it is alleged that the first-named respondent wrongfully and dishonestly actively concealed from the appellant the whole scheme being set up by the first-named respondent with the consent and knowledge of the second-named respondent. This allegation of concert with and, indeed, conspiracy with the second-named respondent is also new.
With the exception of the conspiracy aspect, I am of opinion, for the reasons which I have been indicating, that the amendments proposed by the appellant in so far as they relate to the first-named respondent do not, in any sense, constitute a complete new case. They are really an expansion and arguably perhaps a strengthening of the claim that was made from the start. I will return to the legal implications of that in so far as the motion is concerned when I review the relevant law.
Existing pleadings as against second-named respondent
I now return to the Plenary Summons and the existing Statement of Claim for the purposes of a similar analysis of the claims being made against the second-named respondent. The existing Statement of Claim makes allegations against the second-named respondent which are quite different from those against the first-named respondent. It is necessary to go to paragraph 15 of the Statement of Claim to find any allegation against the second-named respondent. In that paragraph it is alleged that the second-named respondent as the sole trustee of the pension scheme was at all times material to the proceedings under a statutory duty to furnish to the appellant full and accurate information in relation to his entitlements under the pension scheme and further that he owed a fiduciary duty and/or a duty of care to the appellant to ensure that the appellant was aware of and understood the nature of his entitlements. The next paragraph, paragraph 16, then alleges that negligently and in breach of the statutory duty and in breach of the fiduciary duty and in breach of the duty of care the second-named respondent failed to disclose to the appellant any or any adequate information in relation to the pension entitlements. The entire claim, as it stands at the moment against the second-named respondent, is contained in those two paragraphs and it is perfectly clear that there is no allegation whatsoever of fraud, deceit or any kind of deliberate misconduct in either of those paragraphs. I would sum up the position this way. It would seem to me that from the beginning the Statement of Claim was alleging deliberate misbehaviour on the part of the first-named respondent but was merely alleging breaches of duty on the part of the second-named respondent. In both the Plenary Summons and the prayer in the Statement of Claim however the claims for deceit, fraud and/or fraudulent breach of trust and fraudulent misrepresentation are made against both respondents. As I have already observed that is irrelevant. No such case has actually been pleaded against the second-named respondent in the Statement of Claim.
Proposed amendments as against second-named respondent
I now turn to the proposed amendments. These proposed amendments, if allowed, would radically alter the case made against the second-named respondent. There is no doubt that under the proposed amended Statement of Claim serious allegations of fraud and deliberate misconduct are alleged against the second-named respondent which is a well known company carrying on the business of trustee of pension schemes. The allegations against the first-named respondent in the amended paragraph 8 are alleged in that paragraph against the second-named respondent also. The proposed amendment to paragraph 10 which expressly alleges knowledge of the untruth of the representations by both respondents. The allegation of wrongful concealment contained in paragraph 11 is likewise now by way of amendment made against both respondents. The whole of paragraph 12A being the new paragraph in the amended Statement of Claim is prefaced by the allegation that the first-named respondent, its servants or agents were at all material times acting in concert with the second-named respondent. In addition to claims of fraud, fraudulent breach of trust, fraudulent misrepresentation, deceit and dishonesty there is a claim of conspiracy which must necessarily involve both the respondents. Although paragraph 13 in its main body does not bring in the second-named respondent it does so in the particulars of wrongful and dishonest misconduct. In paragraph 16 it is expressly pleaded that the second-named respondent, its servants or agents were also guilty of fraud and/or fraudulent breach of trust and/or fraudulent misrepresentation and/or deceit and/or conspiracy and party and/or privy to dishonest concealment by the first-named respondent.
Consideration of these proposed drastic amendments as far as the second-named respondent is concerned must take into account certain matters which were contained in replies to notices for particulars arising out of the original Statement of Claim.
Possibly unwisely but presumably motivated by the contents of the general endorsement of claim on the Plenary Summons and the prayer in the Statement of Claim the following matter was raised at paragraph 10 of the first notice of particulars served by the second-named respondent arising out of the Statement of Claim. This read as follows:
“Arising from paragraph 14 of the Statement of Claim, please confirm that no allegation of deliberate concealment is made against IPT, its servants or agents.”
That elicited the following reply:
“No so confirmed. The plaintiff claims that the information was concealed from the plaintiff by the first-named respondent. The servants or agents of the first-named respondent were acting as servants or agents of the second-named respondent. The second-named respondent had actual or constructive notice that such information was being concealed by the first-named respondent from the plaintiff and failed to intervene. Please also see Statement of Claim, paragraphs 15 and 16.”
Understandably, the solicitors for the second-named respondent raised the matter again in a notice for further and better particulars. They wrote the following:
“10. Arising from the reply given,
(i) Please give full and detailed particulars of the allegation that IPT had actual notice that information was being concealed from the plaintiff by the first respondent and set out the material facts (but not the evidence thereof) on which the plaintiff relies in alleging that IPT had such notice.
(ii) Please give full and detailed particulars of the allegation that IPT had constructive notice that information was being concealed from the plaintiff by the first respondent and set out the material facts (but not the evidence thereof) on which the plaintiff relies in alleging that IPT had such notice.
(iii) Please give full and detailed particulars of IPT’s alleged ‘failure to intervene’”.
In the reply to that further notice for particulars a hopelessly unsatisfactory answer was given by the solicitors for the appellant. It reads as follows:
“10 (i) This is not an appropriate matter for particulars. This is a matter for evidence of the hearing of the action.
(ii) This is not an appropriate matter for particulars. This is a matter for evidence of the hearing of the action.
(iii) This is not an appropriate matter for particulars. This is a matter for evidence of the hearing of the action”.
In my opinion, the second-named respondent was perfectly entitled to be told the basic facts on which the allegation of deliberate misconduct was being based. I draw the inference and I believe that I am entitled to draw the inference from this correspondence that in so far as there was an allegation made of deliberate concealment against the second-named respondent (which it must be remembered was really only made in a reply to a notice for particulars and not in the Statement of Claim) it was nothing more than a piece of legalistic pleading. It is not alleged that there was any representation made by an employee of the second-named respondent. All that background, in my opinion, is highly relevant when considering the application to amend the Statement of Claim in so far as it concerns the second-named respondent.
The law
Although there is a body of case law which has been helpfully referred to in the written submissions of the three parties, the most important legal source is the relevant rule in the Rules of the Superior Courts in that in many respects its terms are crystal clear. The relevant rule is Rule 1 of O. 28 and it reads as follows:
“The Court may, at any stage of the proceedings, allow either party to alter or amend his endorsement or pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties.”
While undoubtedly there is a discretion in the court as to whether to make the order or not and other factors may come into play, the primary consideration of the court must be whether the amendments are necessary for the purpose of determining the real questions of controversy in the litigation. I am in agreement with the submissions of counsel for the appellant that the learned High Court judge did not adequately address that question but was much more concerned with the procedural conduct of the appellant. The priority which must be given to that issue was clearly restated by the Supreme Court in O’Leary v. Minister for Transport, Energy and Communications [2001] 1ILRM 132. McGuinness J. sat with Denham and Barron JJ. The following passage at p. 143 of the report clearly indicates the approach of McGuinness J. and of the court.
“I accept that there has been undesirable delay in the prosecution of these proceedings. As Mr. Gallagher submitted, the action was instituted very late in the day, and having been instituted late, has been progressed by the applicant at an extremely relaxed pace. Indeed the amount of delay, and the repeated delay is the strongest argument against permitting the inclusion of a new and distinct claim of conspiracy. However this is an application under Order 28 Rule 1, and the delays in the instant case are not outside the well established parameters of that rule. The operation of the rule was considered by the learned Kinlen J. in Bell v. Pederson [1995] 3 IR 511; [1996] 1 ILRM 290. In that case an application to amend the pleadings in a substantial and important way was made on the morning of the trial. The learned Kinlen J. allowed the respondents to amend their defence in the manner sought. In his judgment he approved the principles laid down by Keane J. in Krops v. The Irish Forestry Board Limited and referred also to the dicta of Lynch J. in Director of Public Prosecutions v. Corbett ILRM 674 at p. 678:
‘The day is long past when justice could be defeated by mere technicalities which did not materially prejudice the other party. While courts have a discretion as to amendment that discretion must be exercised judicially and where an amendment can be made without prejudice to the other party and thus enable the real issues to be tried the amendments should be made. If there might be prejudice which could be overcome by an adjournment then the amendments should be made and an adjournment also granted to overcome the possible prejudice and if the amendments might put the other party to extra expense that can be regulated by a suitable order as to costs or by the imposition of a condition that the amending party shall indemnity the other party against such expenses.’
Kinlen J. adopted this reasoning as part of the ratio of his judgment. It appears to me also to be an application of principle which is in accordance with justice.”
Even if I was not bound to do so, I would have no hesitation in following that judgment. I entirely agree with the approach to the interpretation of the rule which it represents.
In some of the High Court decisions cited in the submissions, there has been an overemphasis on an obligation to give good reason for having to amend the pleadings. To a large extent these decisions seem to derive directly or indirectly from an unreported judgment of Barron J. delivered in the High Court on the 21st December, 1992 in the case of Shepperton Investment Company Limited v. Concast [1975] Limited. The material passage in the judgment reads as follows:
“Ultimately however the question is, where does the balance of justice lie. Clearly, if the plaintiff has a good case in respect of its amended claim, it is facing a serious injustice if it is not allowed to make it. Nevertheless before such an amendment should be allowed full disclosure should be made as to the circumstances in which the claim comes to be made and as to why it has not been made sooner. No such effort has been made here in circumstances where the technical evidence apparently available to the plaintiff appears not to support the amendment. Such considerations weaken the case for the plaintiff.”
This passage must be read in the context of views expressed by the learned judge earlier in his judgment. The reference to “full disclosure” “as to the circumstances in which the claim comes to be made” would appear to me to be a reference to the fact heavily criticised in the judgment that the plaintiff had not given proper particulars in replies to a notice for particulars and in particular had relied on the answer “this is a matter of evidence”. Of course, this aspect of the judgment is relevant to the claim to amend the Statement of Claim as against the second-named respondent which I will be dealing with in due course.
What has also influenced the High Court is the decision of this court in McFadden v. Dundalk and Dowdallshill Coursing Club Limited (unreported judgment of Finlay C.J. 22nd April, 1994) in which the court upheld the judgment of the High Court (Johnson J.) in refusing an amendment by the respondents of a defence to plead that the plaintiff was a member of the Club on an application made some three days before the intended date of trial on the basis that no information was given in the affidavit as to why the matter had not been adverted to before that point in time and why the application had not been brought at an earlier point in time. The McFadden judgment was delivered ex tempore as a ruling of the court. The proceedings had been commenced by a summons in December, 1990 and were brought forward for trial. The case came on for trial in Dundalk, was listed and ready for hearing in a session prior to December, 1993 but though intended to be taken up by reason of the amount of work on that day the case fell out of the list and was adjourned to be tried in the December session. At that stage the position of the case in the list in Dundalk was going to give it a secure chance of getting a hearing. The December sittings in Dundalk commenced on the 9th December and an application was made to the High Court on the 6th December by the respondents to amend their defence to raise the plea that the plaintiff was a member of the Club and that, therefore, he could not sue as a member of an unincorporated body. This is what Finlay C.J. had to say:
“This is a preliminary point which the court is quite satisfied is a purely technical point particularly on the facts of this case. At least it is quite clearly without any merits though it may be a good legal point. The court does not express any views about that. The question then is whether the court should exercise a discretion to permit the respondents to amend their defence. To raise a purely technical point at this stage, the learned trial judge of the High Court decided that it was too late. This court is of the same view. No explanation was given on any affidavit as to why the matter was not adverted to or why it was not in the original defence or why there was not any application made before the time when it was.”
It is clear from that passage and from later parts of the ex tempore ruling that the court was understandably taking the view that having regard to the late state at which the proceedings were at and its listing history it would on the face of it be quite wrong to permit the amendment. But as I interpret the judgment, the references to an affidavit and to reasons was a reference to the obvious fact that there could be exceptional reasons for allowing an amendment even at that late stage in which case those exceptional reasons would have to be fully set out in evidence before the court and that was not done. I do not think that McFadden can be cited as an authority for any general principle as to what the contents of an affidavit have to be in an application to be allowed deliver an amended pleading.
Shepperton and McFadden were both cited by and relied on by Flood J. in Palamos Properties Limited v. Brooks [1996] 3 IR 597. With reference to the two cases Flood J. said the following at p. 605:
“In my opinion these decisions amount to this. That within the facts underlying the claim before the courts there must be such evidence from which an inference can reasonably be drawn as to why the plea which is sought to be introduced by way of amendment was not put in the original defence or express evidence given to explain the failure in a manner which renders the omission broadly excusable if not actually justifiable.”
For the kind of reasons which I have indicated, I would express doubt that those cases support such a broad proposition as enunciated by Flood J. Both cases were special to their own peculiar facts. There are, however, some other pertinent and useful quotations from English cases in the judgment of Flood J. He first cites the well known case of Cropper v. Smyth (1884) 26 Ch D 700 at pp. 710-711 where Bowen L.J. said the following:
“It is a well established principle that the object of the courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights… I know of no kind of error or mistake, which if not fraudulent or intended to overreach, the court ought not to correct, if it can be done without injustice to the other parties. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace …It seems to me that as soon as it appears that the way in which the party has framed his case will not lead to a decision on the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right.”
Flood J. also cites Woolf L.J. in Bower v. Maxwell (unreported judgment Court of Appeal England 8th May, 1989):
“The mere fact that where delay has been occasioned by a party who seeks to obtain leave to amend his pleadings to introduce new issues, that that delay may be capable of being compensated in money is not conclusive of the question whether the amendment should or should not be permitted. The respondent’s conduct … must be such that it can be regarded as justifiable or at any rate excusable.
If the respondent’s is not justifiable or excusable then that factor has to be taken into consideration as part of the matters to be weighed in deciding whether or not it will allow the amendment and of course where the result of taking it into consideration is countered by the factor that they would be prejudiced to the plaintiff by allowing the amendment, the amendment should not be allowed.”
Questions as to how O. 28, r. 1 is to be interpreted also came before Kinlen J. in Bell v. Pederson [1995] 3 IR 511. In that case the learned judge referred to McFadden, Palamos and DPP v. Corbett already cited. It is not entirely clear what exact principle the learned judge drew from these cases but he does seem to have quite correctly addressed the question of prejudice to the plaintiff in circumstances where the respondent was seeking to amend his defence in a libel action by pleading express malice. In deciding what he should do Kinlen J. clearly had regard to the question of why the plea was not originally in the defence and he was satisfied that this could be traced to the failure of the respondent’s solicitor to provide counsel with the second page of the alleged defamatory letter. He came to the conclusion that the amendment should be granted in that prejudice could be met by appropriate costs order.
An important High Court decision is Krops v. The Irish Forestry Board Limited [1995] 2 IR 113 where Keane J. (as he then was) carefully considered the ambit of O. 28, r. 1 and held that the court has a wide jurisdiction to amend pleadings in such manner and on such terms as it considers just in the circumstances. He went on to hold that as a matter of principle, pleadings carry with them from the time they are issued or delivered the potentiality of being amended by the court and that since the proceedings were always capable of amendment by the court in such manner as might be just and in order to allow the real question and controversy between the parties to be determined. The mere fact that if a new cause of action sought to be included in the Statement of Claim had been brought by separate action it would be statute barred does not prevent the amendment being granted. This decision has particular relevance to the objection to the inclusion of “1999” in the proposed amended Statement of Claim. But if that really is the year when the plaintiff acquired the knowledge it is prima facie a necessary amendment for having the real issues tried or certainly, it would have to be included in a Reply. The insertion of date of knowledge is merely an expansion of the claim being made at any rate.
Conclusion on application to amend Statement of Claim
Having outlined the nature of the claims against each respondent as pleaded in the existing Statement of Claim and having reviewed the case law relating to this kind of application, I turn now to the conclusions which I have arrived at. But before setting out what those conclusions are I think it important to refer to certain aspects of the judgment of the High Court. Although the learned High Court judge undoubtedly accepted all or certainly most of the submissions put forward on behalf of each of the respondents in this court and which had equally been put forward before him in the High Court, it is clear nevertheless from the whole tenor of his judgment that he was particularly strongly influenced by what he perceived as procedural misbehaviour on the part of the appellant. For the most part, I would be in full agreement with his strictures in this regard. Notwithstanding that the appellant brought his own motion for directions, at no stage was it apparently intimated to Smyth J. that following on the directions or following on discovery there would probably be an application to amend the Statement of Claim and an application to deliver late Replies. At p. 9 of the transcript of his judgment, the learned High Court judge had this to say:
“At the hearing of the motion for directions, the application of the plaintiff was that five to ten cases should proceed to a full and final hearing as test cases. If there was any intention to amend the pleadings in those cases (of which Mr. Croke was one), then clearly such were not ready for hearing and this fact (if it were so at the time, i.e. 25th June 2003) should have been disclosed to the court as it was, if it was a material fact and of potential relevance to the consideration by the court on the motion for directions which were then before it.”
I agree with that statement and I also agree with the learned High Court judge’s rejection of the excuse put forward that it was appropriate to bring the application for directions ahead of any application to amend the Statement of Claim or deliver a late Reply. The learned High Court judge went a step further and declared himself satisfied and found as a fact on the evidence before him “that notwithstanding the plaintiff having the defence of IPT (on the 25th May, 2002) and Waterford (on the 8th January, 2003) expressly pleading the provisions of the Statute of Limitations, 1957 that the plaintiffs had no intention that can be objectively determined to amend the pleadings until after the order of the High Court on the 26th June, 2003.” That, of course, was the order making the directions. It does seem to me that there was a certain element of disingenuousness on the part of the appellants. There is a danger, however, that in overly concentrating on these discrepancies in the procedural behaviour of the appellants the real purpose of the rule may become forgotten. While I quite agree that other factors have to be taken into account in the exercise of the discretion, the primary purpose of the rule is to give the court wide powers of amendment so that the real issues between the parties can be determined. This is always subject to questions of real prejudice to the respondent but some aspects of prejudice can be dealt with by appropriate costs orders or conditions. Inserting the date of knowledge into the Statement of Claim is a helpful piece of clarification but contrary to what the learned High Court judge seemed to imply it is not necessary for the purposes of meeting a plea of the Statute of Limitations. As I have already pointed out, it is in the Reply that the date of knowledge must be inserted. If there is any legitimacy in the trial judge’s strictures in relation to this part of the amendments i.e. the amendment inserting the date of knowledge, they are more appropriate to the application for liberty to deliver a late Reply than to the application to amend the Statement of Claim.
I do not think it would be right for a court on an interlocutory application such as this to speculate in any way as to whether a date of knowledge proposed to be inserted is in some way bogus or not. As will emerge I take the view that the order permitting late delivery of the Reply to the first-named respondent’s defence ought to be granted and as the date of knowledge is inserted in it, it would seem sensible that it be inserted in the amended Statement of Claim at least if some of the other amendments are approved by this court.
These other amendments essentially relate to allegations of fraud and deliberate misconduct. While these causes of action involving deliberate misconduct such as fraud, deceit etc. were not properly pleaded in the original Statement of Claim such allegations, in my view, are implicit in the existing Statement of Claim for the reasons which I have already indicated and I, therefore, think it is appropriate that they be properly pleaded and made explicit. Interestingly, the learned High Court judge at p. 11 of the transcript of his judgment that a submission had been made to him in the High Court on the 25th June, 2003 that “in the present case, the plaintiffs have fully pleaded the fraud and have given particulars of the fraud.”
The reference to “particulars of the fraud” is also interesting. Paragraph 13 of the first-named respondent’s notice for particulars dated 16th July, 2002 is in the following terms:
“The plaintiff claims damages for deceit, fraud and/or fraudulent breach of trust and/or fraudulent misrepresentation. Please give full and detailed particulars of the matters relied on by the plaintiff to support the said allegations.”
The solicitors for the appellant in a letter dated 8th August, 2002 replied to
that particular as follows:
“See paragraph 12 of the Statement of Claim. Moreover the plaintiff claims that the second-named respondent knew and was aware and/or ought to have been aware that the first-named respondent was operating a voluntary redundancy scheme in which pension funds were being paid out. Such pension refunds were being paid out without the plaintiff being properly informed and/or advised either by the first-named respondent or the second-named respondent as to his proper rights and entitlements. In so far as the second-named respondent did not inform the plaintiff of his rights as the second-named respondent was under a fiduciary and statutory duty to do, the second-named respondent in effect failed in its legal obligation to provide information to the plaintiff. The second-named respondent was also aware or ought to have been aware of the misrepresentation made by the first-named respondent to the plaintiff. The first-named respondent represented to the plaintiff that he had no pension entitlements or alternatively he did not represent to the plaintiff that he had pension entitlements. In so doing the first-named respondent was acting in circumstances where they were acting as servants or agents of the second-named respondent”.
It seems clear that however badly it was pleaded, a fraud claim of some sort against the first-named respondent was at all material times in the mind of the appellant. I believe that the position relating to the second-named respondent is quite different and I will come to it in due course.
It is not clear to me that the amendments as against the first-named respondent would give rise to any relevant legal prejudice. If by reason of the appellant’s date of knowledge the action which might otherwise have been statute barred is not in fact statute barred it cannot be said that prejudice has arisen. It is not necessary for this purpose to apply the principles adopted by Keane J. in Krops v. The Irish Forestry Board cited above.
The learned High Court judge, although carefully dealing with all aspects of the case, did not place sufficient emphasis on the basic purpose of the rule which is intended to be a liberal rule. I am, therefore, of the view that as against the first-named respondent the appellant ought to be allowed deliver an amended Statement of Claim. I will return to the question of the form that that amended Statement of Claim should take.
In so far as the appellant wants to amend the Statement of Claim as against the second-named respondent I take a different view. In the earlier part of this judgment, I have demonstrated by reference to the pleadings in the existing Statement of Claim and by reference to the replies to the two notices for particulars sent by that respondent that the appellant has not put forward any factual basis whatsoever to support a fraud or any kind of deliberate misconduct claim against the second-named respondent. In the replies to particulars there is a vague allegation that deliberate misrepresentations made by the first-named respondent were made by that respondent as agent for the second-named respondent. But there are no particulars even remotely supporting that proposition. There are no allegations against any single named employee of the second-named respondent and, of course, having regard to the nature of the second-named respondent company fraud or conspiracy allegations against it would be particularly serious.
What are the real issues between the parties? At best from the appellant’s point of view there are both positive and negative issues as against the first-named respondent, that is to say, issues of fraud and breach of duty but as against the second-named respondent no factual basis has been given to support any allegation against it other than the negative one of breach of duty. Accordingly, I would refuse leave to amend the Statement of Claim as against the second-named respondent.
It logically follows that I would not grant leave to deliver the amended Statement of Claim in its present form because that includes claims of fraud and conspiracy and other deliberate misconduct against the second-named respondent. I would take the view that before the court can make a final order permitting the delivery of an amended Statement of Claim as against the first-named respondent it will have to have sight of the re-amended draft. It would be wholly wrong for the court to attempt its own amendments. It is for the appellant to plead his case. Therefore, when I say that I would grant leave for delivery of an amended Statement of Claim as against the first-named respondent, I mean an amended Statement of Claim suitably re-amended and approved by the court so as to exclude the amended claims against the second-named respondent.
Conclusions on application for leave to deliver late Reply to each of the defences
If there is an answer to a plea of the Statute of Limitations that answer must be pleaded in a Reply. While it is true that there are time limits for the delivery of a Reply there would have to be extraordinary circumstances in my view for a court to deprive a plaintiff of the right to adduce a perfectly good answer to a plea of the Statute of Limitations effectively on a time point. On that ground alone I would have no difficulty in the court permitting the plaintiff to deliver Replies to the defences of both respondents. I see no objection to including the other matters which do not relate to statute bar. The mechanics of the order would have to differ in relation to each Reply. It would seem to me that the court may straight away set aside the refusal order of the High Court and permit the delivery of a Reply to the Defence of the second-named respondent since in relation to that action I have taken the view that leave should not be given to amend the Statement of Claim as against that respondent. However, it would be pointless at this stage to give leave for the delivery of a Reply to the Defence of the first-named respondent if the court is giving leave to amend the Statement of Claim against that respondent. Obviously, it would be part and parcel of that order that the first-named respondent would have liberty to deliver an amended Defence to that amended Statement of Claim and the proper order for the court to make would be to give liberty to the appellant to deliver a Reply to the amended Defence of the first-named respondent within an appropriate period. The order could provide that in the unlikely event that there would be no amended Defence the appellant would have leave to deliver a Reply to the existing Defence. It is important that the delivery of these amended and additional pleadings be expedited because, apart from anything else, this court has still to hear and determine the appeal from the High Court order for directions.
In summary, I would allow the appeal of the appellant against the first-named respondent in both motions subject to the re-amending of the amended Statement of Claim as indicated. I would dismiss the appeal of the appellant against the second-named respondent on the motion seeking liberty to amend the Statement of Claim in so far as it would contain additional allegations against the second-named respondent but I would allow the appeal on the motion seeking liberty to deliver a Reply to the defence of the second-named respondent. The Reply permitted to be delivered as against the first-named respondent would be a Reply to an amended Defence following on delivery of an amended Statement of Claim.
Croke v. Waterford Crystal Ltd.
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