Grehan & Anor v Dublin City Council (Approved)

Factual and Procedural Background

The Plaintiffs alleged loss and damage caused by the Defendant, City Council, relating to a water leak at their residence between May and November 2015. Proceedings commenced in February 2019 by Plenary Summons. The City Council entered an Appearance in March 2019 and delivered its Defence in July 2019. The Plaintiffs served a Notice of Trial in February 2023. In May 2023, the City Council sought and was granted leave by the Court to issue a Third-Party Notice on Company A (Irish Water). The Third-Party Notice was issued and served on Company A in June 2023. Company A subsequently applied to set aside this Third-Party Notice.

Legal Issues Presented

1. Whether the Third-Party Notice served on Company A by the City Council was issued "as soon as is reasonably possible" within the meaning of section 27(1)(b) of the Civil Liability Act 1961 (as amended).
2. Whether the delay in issuing the Third-Party Notice, which exceeded four years beyond the prescribed time limit under Order 16, rule 1(3) of the Rules of the Superior Courts 1986, justified setting aside the Third-Party proceedings pursuant to Order 16, rule 8(3) RSC 1986.

Arguments of the Parties

Company A's Arguments

• The Third-Party Notice was not served as soon as reasonably possible, given the delay of over four years from when the application should have been brought.
• The City Council failed to provide sufficient explanation for the delay, which was not justified by complexity, investigations, or other valid reasons.
• The City Council's reliance on the absence of prejudice to Company A is misplaced, as prejudice is not a requirement in applications to set aside Third-Party Notices.
• Company A rejected the suggestion that it contributed to the delay by not committing to an indemnity, emphasizing that no such commitment was ever made.

City Council's Arguments

• The City Council acknowledged non-compliance with the 28-day time limit but argued the issue was whether the Third-Party Notice was served as soon as reasonably possible.
• The delay was explained by the City Council's position that the Plaintiffs should have sued Company A directly and the existence of a Service Level Agreement (SLA) under which the City Council sought indemnity from Company A.
• The City Council relied on correspondence and a general timeline to justify the delay, including ongoing indemnity discussions and investigations by Company A's insurers.
• The City Council contended that Company A had not been prejudiced by the delay, suggesting this supported the validity of the Third-Party Notice.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court acknowledged the City Council’s failure to comply with the 28-day time limit for issuing the Third-Party Notice under Order 16, rule 1(3) RSC 1986, but noted that non-compliance alone was not dispositive. The central legal test was whether the Third-Party Notice was served "as soon as is reasonably possible" under section 27(1)(b) of the Civil Liability Act 1961.

The Court examined the timeline and evidence, noting a delay of over four years from when the application should have been made. The City Council’s justification rested on the position that Company A was the appropriate party and that indemnity issues under an SLA justified the delay. However, the Court found these reasons insufficient to meet the legal threshold, as there was no evidence of necessity for additional investigations, complexities, or other valid causes for delay.

Precedents were cited to clarify that the inquiry focuses on the reasonableness of the delay rather than prejudice to the third party. The City Council’s reliance on absence of prejudice was rejected, consistent with the governing case law. The Court further rejected the City Council’s suggestion that Company A’s failure to commit to an indemnity contributed to the delay.

Overall, the Court concluded that the City Council did not act as soon as reasonably possible in issuing the Third-Party Notice, and thus the Third-Party proceedings should be set aside.

Holding and Implications

The Court SET ASIDE the Third-Party Proceedings dated 12 June 2023 issued by the City Council and served on Company A on 23 June 2023, pursuant to Order 16, rule 8(3) of the Rules of the Superior Courts 1986.

As a direct consequence, the Third-Party Notice is nullified and Company A is relieved from the procedural obligation to respond to it. The Court awarded costs in favor of Company A against the City Council, to be assessed if not agreed. No broader precedent was established beyond the application of existing principles concerning the timing of Third-Party Notices and the interpretation of "as soon as reasonably possible" under the Civil Liability Act 1961.