Silverdale & Hewett's Travel Agencies Ltd (plaintiff) v Italiatour Ltd trading as Off Shore World Cup '94 and David Dryer and David Dryer Sports Tours Ltd (defendants).

Practice and Procedure - Application to dismiss plaintiff's proceedings on grounds of delay - Plaintiff not being personally blameworthy - Whether prejudice to first defendant arising out of liquidation of third defendant - First defendant failing to bring application until after expiry of limitation period - Whether balance of justice in favour of action proceeding.

The High Court (before Mr Jus- tice Finnegan); judgment delivered 7 November 2000.

Where a plaintiff was a substantial commercial enterprise, it had a duty to ensure that its claim was prosecuted with reasonable expedition and the fact that it was not personally to blame for delay in prosecuting its case was of little significance in an application to dismiss its claim on the basis of delay. Furthermore, in considering whether the balance of justice lay in favour of the plaintiff's action proceeding, the defendant must show prejudice arising out of the plaintiff's delay. There was no prejudice arising out of the plaintiff's delay in circumstances where the third defendant, against whom the first defendant had hoped to get an order for contribution and indemnity, had gone into liquidation during the period of delay since its trading record was such that it would have been unlikely to satisfy such a judgment prior to going into liquidation. The second defendant's failure to take any interest in the proceedings was not as a result of the liquidation, since his concerns in relation to the claim against him personally could not have changed as a result of this event, and consequently the first defendant had not shown prejudice to it arising out of the plaintiff's delay.

Mr Justice Finnegan so held in refusing the first defendant's application to strike out the plaintiff's proceedings on grounds of delay.

Senan Allen SC for the plaintiff; Colm O hOisin BL for the first defendant.

Mr Justice Finnegan said that the plaintiff's claim was for breach of contract. The plaintiff alleged that it had entered into an agreement with the first defendant to act as agent for the first defendant in Ireland for the sale in Ireland of travel packages to the 1994 World Cup in the United States. It alleged that the agreement had been negotiated and concluded with the second and third defendants acting as agents for the first defendant. The central issue in the action was the authority of the second and third defendants to conclude the alleged agreement.

Mr Justice Finnegan said that proceedings had been instituted against the first defendant on 19 June 1995. The second and third defendants had been joined on 13 May 1996. There had been no correspondence between the solicitors for the plaintiff and the solicitors for the first defendant between June 1997 and 25 May 1999, when a notice of intention to proceed had been served. Mr Justice Finnegan set out the history of the proceedings and said that it was clear that there had been delay on the part of the plaintiff from early June 1996 to late July 1999. The first defendant now sought an order pursuant to the inherent jurisdiction of the court dismissing the proceedings as against the first defendant on grounds that the plaintiff had been guilty of inordinate and inexcusable delay in prosecuting the proceedings. Alternatively, the plaintiff sought an order under Order 122, rule 11, of the Rules of the Superior Courts, or an Order pursuant to Order 36, rule 12 (b).

Mr Justice Finnegan said that the broad principles applicable to an application of this nature had been set out by former President of the High Court, Mr Justice Finlay, in Rainsford v Limerick Corporation [1995] 2 ILRM 561, at page 567, where he said that inquiry should be made as to whether the delay on the part of the person seeking to proceed has been firstly inordinate and even if inordinate has it been inexcusable, and even where delay had been both inordinate and inexcusable, the court must further proceed to exercise a judgment on whether in its discretion on the facts the balance of justice was in favour of or against the proceeding of the case. Delay on the part of a defendant seeking a dismiss of the action, and to some extent a failure on his part to exercise his right to apply at any given time for the dismiss of an action for want of prosecution, might be an ingredient in the exercise by the court of its discretion. Finally, while a party acting through a solicitor must to be an extent be vicariously liable for the inactivity of his solicitor, consideration of the extent of the litigant's personal blameworthiness for delay is material to the exercise of the court's discretion.

Mr Justice Finnegan said that he found the delay of the plaintiff to be both inordinate and inexcusable. There was no personal blameworthiness on the part of the plaintiff beyond that of its solicitor for which it was vicariously liable. Mr Justice Finnegan said that that was a factor which must be taken into account in exercising his discretion to dismiss the plaintiff's claim. In considering this factor one must look at the circumstances of the party. Such considerations had little application to the plaintiff in this case, which was a considerable commercial enterprise and must be expected to pursue litigation of a commercial nature with reasonable expedition and to that end take steps to ensure that its legal advisers act in an appropriately expeditious manner. Lack of personal blameworthiness in litigation such as this was of less significance than in cases such as O'Domhnaill v Merrick [1984] IR 151, where the fact of the infancy of the plaintiff was held to be relevant to the delay during his minority, and Guerin v Guerin [1992] 2 IR 287, where Mr Justice Costello had had regard to the fact that while the plaintiff was an infant, his family lived in one of the poorest sections of the community and were unaware that he had a cause of action. Mr Justice Finnegan said that in proceeding to determine on the facts whether the balance of justice of justice was in favour of or against the proceeding of the case, there must be a balancing of the prejudice to the plaintiff in having his claim against the first defendant dismissed and any prejudice to the first defendant in the matter proceeding resulting from the plaintiff's delay.

The third defendant had gone into liquidation on 1 July 1998, with an estimated deficiency of some £545,000 sterling. Notwithstanding that the third defendant had a poor trading performance, it seemed likely that it could well have continued to trade had it not run into difficulties in organising tours for the 1998 World Cup, which difficulties were the immediate cause of its collapse. The first defendant claimed that it had been prejudiced by the plaintiff's delay in that, had the claim been prosecuted diligently, a hearing would have been obtained in advance of the liquidation of the third defendant. Further, following the liquidation of the third defendant, the second defendant took no interest in the proceedings and there was now no solicitor on record for either defendant. The first defendant alleged that the delay had denied them the opportunity of obtaining contribution or indemnity from the second defendant. Mr Justice Finnegan said that had the action been prosecuted by the plaintiff with reasonable expedition, it could have obtained a date for hearing during the legal year 1997-/98. Having regard to the trading history of the third defendant, he was not satisfied that, had the first defendant obtained a judgment for contribution or indemnity prior to liquidation, the third defendant would have been in a position to satisfy the judgment. In those circumstances, it was unlikely that the liquidation was a circumstance which would have led the second defendant to adopt an attitude to the litigation different to that which he was now adopting and it was not one which rendered the delay prejudicial to the first defendant.

The first defendant further claimed to be prejudiced in that it was now unlikely that the second defendant would appear at the hearing and that it would be denied his evidence which would be likely to benefit the first defendant, first, in enabling it to test the account of negotiations between the plaintiff and the second defendant which would be given in evidence adduced on behalf of the plaintiff, and secondly, on the issue as to implied authority of the second and third defendants to bind the first defendant.

Mr Justice Finnegan said that while he could have no knowledge of the evidence which the second defendant would give if available as a witness, it was appropriate that he should assume for the purposes of this application that it could be of assistance to the first defendant. The circumstances in relation to the claim against the second defendant personally had not been altered by the liquidation of the third defendant. Judgment against him could readily be enforced in the United Kingdom, and the non-availability of the third defendant to bear some or all of an award of damages might be expected to cause him to take all steps to avoid personal liability. As a matter of probability, he would have adopted a like attitude to the proceedings had the liquidation of the third defendant not taken place. The absence of the second defendant's evidence might also prejudice the plaintiff in that there would not be available at trial his account of the authority, if any, which he held from the first defendant. Mr Justice Finnegan said that, as a matter of probability, the non-availability of the second defendant as a witness was not as a result of the plaintiff's delay and the intervening liquidation of the third defendant, and was not a circumstance which he should take into account in considering the balance of justice.

Mr Justice Finnegan said that the plaintiff's claim would have been barred in February 2000. The first defendant could have issued this motion at any time after July 1998, but it had chosen to delay doing so until the limitation period had elapsed. That had been taken into account in determining the balance of justice.

Mr Justice Finnegan said that he was satisfied that the balance of justice was in favour of allowing the action to proceed. However, justice required that a condition be imposed on the plaintiff in prosecuting the action. Having elected to join the second defendant and the third defendant as defendants, rather than have the first defendant join them as third parties, the action must not be set down against the first defendant only, but must be set down against the first defendant and the second defendant so that the first defendant's claim for contribution and indemnity could proceed at the same time.

Solicitors: L. K. Shields (Dublin) for the plaintiff; Gleeson McGrath Baldwin (Dublin) for the first defendant.

Siobhan Stack, Barrister