EBS BUILDING SOCIETY –v- WILLIAM E. LEAHY & OTHERS (PRACTISING UNDER THE STYLE AND TITLE OF LEAHY AND PARTNERS) AND PATRICK McMAHON JUNIOR, PATRICK McMAHON SENIOR AND KEVIN McMAHON

HIGH COURT JUDGMENT of Mr. Justice Hogan delivered on the 6th day of December, 2010

by Cathal N. Young, O'Reilly & Co. Solicitors & Notaries Public in Dublin
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JUDGMENT of Mr. Justice Hogan delivered on the 6th day of December, 2010

1. This is an application by the third parties to have a third party notice dated 23rd December, 2009 - in which the defendants (who are a firm of solicitors)(“the solicitors”) seek an indemnity in respect of the claims brought against them by the plaintiff building society (“EBS”) - set aside for non-compliance with the requirements of s. 27(1)(b) of the Civil Liability Act 1961. In essence, the contention of the third parties is that the notice was not served “as soon as is reasonably possible” within the meaning of this statutory provision.

2. The present proceedings arise in this way. The EBS claims that in January, 2007 it offered loan facilities in the sum of €1.45m to Patrick McMahon Junior, one of the third parties. The object of this loan was to allow Mr. McMahon Junior to purchase a 3.36 acre site at Sixmilebridge, Co. Clare and to re-finance a loan held with Bank of Scotland Ireland. While the security offered included a first legal charge over property situate at Mungret, Co. Limerick comprised in Folio 3949 for County Limerick, it also comprised a first legal charge over the 3.36 acre site at Six Mile Bridge, Co. Clare and a first legal charge over properly at Monaleen Road, Castletroy, Limerick. One of the loan conditions was that Mr. McMahon’s then solicitors, Messrs. Leahy and Partners, should certify title to these lands.

3. The EBS further claims that the defendant solicitors duly furnished a certificate of title on 29th January, 2007, and that on foot of this it duly advanced the loan facilities. As it happens, Mr. Patrick McMahon Junior defaulted on this loan and an order for possession in respect of the Six Mile Bridge and Monaleen Road properties was duly made in favour of the plaintiff building society by this Court (McGovern J.) on 24th November, 2008. 4. The plaintiff contends that it then emerged that the lands in question were in fact owned by Patrick McMahon Senior, the father of Patrick McMahon Junior. If this is correct, then, of course, one of the parcels of land held by the EBS as collateral for the loan is worthless for this purpose and it has thereby been deprived of one of its items of security.

5. The EBS commenced these present proceedings on 24th February, 2009, and a statement of claim was delivered on 31st March, 2009. It claims damages as against the defendant solicitors for negligence, misrepresentation and negligent misstatement. As it happens, the solicitors had already issued separate proceedings on 27th January, 2009 (bearing record number 2009 No. 714 P) by which they claimed damages as the third parties in the present proceedings. In those proceedings the solicitors (as plaintiffs) seek damages for deceit, conspiracy, negligence and misrepresentation as against the McMahons as defendants.

6. Returning to the present proceedings, the solicitors filed a defence on 22nd June, 2009. The EBS replied to a notice for particulars on 3rd September, 2009. On 23rd November, 2009 the solicitors issued a motion seeking to join the McMahons as third parties. On 21st December, 2009 this Court (Quirke J.) made an order granting the solicitors liberty to issue and serve a third party notice on the McMahons. That order was served on 23rd December, 2009.

7. Patrick McMahon Junior has now brought a motion pursuant to O. 12, r. 26 RSC seeking to have the third party notice set aside. Patrick McMahon Senior and Kevin McMahon supported this position at the hearing before me.

8. Section 27(1)(b) of the Civil Liability Act 1961 provides:

“A concurrent wrongdoer who is sued for damages or for contribution and who wishes to make a claim for contribution under this Part-(2)(b) shall, if the said person is not already a party to the action, serve a third party notice upon such person as soon is reasonably possible and, having served such notice, he shall not be entitled to claim contribution except under the third party procedure. If such third party notice is not served as aforesaid, the court may in its discretion refuse to make an order for contribution against the person from whom the contribution is claimed.”

9. The objectives of this sub-section are by now so well established in the voluminous case-law on the topic that it is scarcely necessary to set them out at length here. Briefly, the 1961 Act seeks to avoid a multiplicity of actions arising out of the same dispute, so that where possible all issues involving plaintiffs, defendants and third parties are heard either together or in a sequenced trial: see, e.g., Governor of St. Laurence’s Hospital v. Staunton [1990] 2 I.R. 31, Connolly v. Casey [2003] 1 I.R . 345 and Robins v. Coleman [2009] IEHC 486.

10. Second, the concept of what is “as soon is reasonably possible” within the meaning of s. 27(1)(b) is a relative one and depends on the circumstances of the case: see, e.g., Connolly v. Casey, Mulloy v. Dublin Corporation [2001] 4 I.R. 52

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Reference Info: n/a | Ireland

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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