A recent High Court judgment concerning an application to set aside a third-party notice provides a timely reminder of the perils of delaying the decision to join other parties to proceedings. The background to the case of Ashford Castle Limited & Another v. E.J. Deacy Contractors & Industrial Maintenance Limited & Others ( IEHC 549 (“Ashford”)) is that restoration works at the famous “Ashford Castle” had allegedly been negligently performed resulting in water ingress to a number of the hotel’s rooms. The plaintiff sought damages for building repairs and business interruption.
The first defendant’s (the main contractor) defence was that the restoration works were carried out by a ‘nominated subcontractor’ (Conservation and Restoration (Ireland) Ltd) who were appointed by the second defendant (the architect) and/or the third defendant (the project manager) and so the subcontractor was not a ‘domestic subcontractor’ whose works would have been under the control of the main contractor.
The subcontractor was subsequently joined as a third party to the proceedings by the architect and this judgment considers an application by the subcontractor to have the architect’s third-party notice set aside on grounds of delay.
Chronology of the proceedings
A statement of claim was delivered on 29 May 2018 and thereafter the main contractor’s defence was delivered to the plaintiff on 6 March 2019 (and the main contractor sought voluntary discovery from the architect on the same day – to establish that the subcontractor was a ‘nominated subcontractor’). On 28 November 2019, the architect sought a copy of the main contractor’s defence and was provided with a copy of same on 27 January 2020.
There was an almost 21 month delay between the delivery of the statement of claim (29 May 2018) and the filing of the motion to join the subcontractor as a third-party (17 February 2020). However, the architect sought to explain this delay by reference to its need to obtain a sufficient expert opinion (in the form of an addendum to an earlier expert report dated 2 February 2020) that there was a stateable case for a claim of professional negligence against the subcontractor.
There was a further delay of some five weeks later between the issuance and service of the third-party notice on the subcontractor (24 March 2020). Due to the aforementioned delays, the subcontractor brought a motion seeking to have themselves removed as a third-party to the proceedings.
Examination of the architect’s delay
Before turning to an examination of architect’s defence to the subcontractor’s motion, the Court examined the legal principles governing such ‘set aside’ applications.
Under s.27 of the Civil Liability Act 1961 “a defendant, who wishes to make a claim for contribution, must serve a third-party notice as soon as is reasonably possible” (emphasis added). The Court went on to note that “the onus is on the defendant, who has joined the third-party, to explain and justify any delay” and that “it is incumbent on the court to look not only at the explanations which have been given by a defendant for any purported delay, but also to make an objective assessment as to whether, in the whole circumstances of the case and its general progress, the third-party notice was served as soon as is reasonably possible”.
The architect had two main defences as justification for its delay. Firstly, as the claim against the subcontractor related to an allegation of professional negligence, the architect felt that it was important to acquire an independent expert opinion on the matter, and that it was not appropriate for the parties themselves to carry out such an action. Secondly, the architect argued it was reasonable to await sight of the main contractor’s defence before deciding whether to pursue a claim for contribution.
When considering these grounds of defence, the second limb was dismissed quickly by the Court as it found that the architect was on notice from 6 March 2019 of the “gist of the main contractor’s defence” as it had been spelt out in the letter seeking voluntary discovery. The Court found that “it should have been obvious to the architect and its legal advisors at that stage that consideration would have to be given to joining the subcontractor as a third-party”.
When considering the first limb of the architect’s defence for its delay the Court referenced the case of Cooke v. Cronin ( IESC 54) and noted that “it is irresponsible and an abuse of the process of the court to commence professional negligence proceedings without first ascertaining that there are reasonable grounds for so doing”.
Notwithstanding the architect’s arguments, the Court dismissed the first ground of defence for the following reasons:
- The architect had been aware of the nature of the defects from its own inspection of the works in 2015 and so it “already had sufficient information to meet the threshold for pursing a claim for contribution against the subcontractor”;
- The Court noted that the architect had obtained an initial expert report on 3 March 2019 but that no proper explanation had been provided as to why the original report needed to be supplemented nor for the delay of 11 months in obtaining an addendum to the expert report;
- Reliance had been placed by the architect on the Supreme Court case of Connolly v. Casey ( IESC 76;  1 I.R. 345) where a principle to protect a professional against abusive claims had been established. However, the Court noted the related principle that a third-party should be informed of a claim for contribution in a timely manner. The Court found the architect had adopted an “overly cautious approach” and that the delay of almost 21 months before the subcontractor was alerted of the claim was “disproportionate to the disbenefit of the delayed notification of the claim against” it.
For the above reasons, the Court held that the architect had failed to discharge the onus upon it to explain and justify the delay in joining the subcontractor to the proceedings.
The Ashford judgment shows that a delay of 21 months in issuing an application to join a third-party was far beyond what the Court considered a reasonable delay and so the motion to ‘set aside’ brought by the subcontractor was allowed by the Court. In its concluding remarks, the Court specifically noted that a delay of such length would not comply with section 27(1)(b) of the Civil Liability Act 1961.
The judgment serves as a useful reminder of the need to quickly identify any co-defendants or those who may be liable for contribution when one is served with proceedings.