United Meat Packers (Ballaghadereen) Ltd (in receivership) (plaintiff/ appellant) v Nordstern Allgemeine Versicherungs-AG and Others (defendants/ respondents).

Practice - Summons - Service abroad - Whether High Court had jurisdiction to give leave for service out of the jurisdiction - Whether Lugano Convention applied to the proceedings - Rules of the Superior Courts 1986 (SI No 15 of 1986), Order 11, Order 11A - Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act 1988 (No 3 of 1988).

Practice - Leave to amend pleadings - Whether pleadings can be amended by addition - Rules of the Superior Courts 1986 (SI No 15 of 1986), Order 28 Rule 12.

The Supreme Court (before Mr Justice O'Flaherty, Mr Justice Barrington and Mr Justice Keane); judgment delivered ex tempore 24 June 1997.

Where leave is granted under Order 11 of the Rules of the Superior Courts for liberty to serve proceedings out of the jurisdiction on inapplicable grounds, due to an error in the plaintiff's affidavit, this did not vitiate the jurisdiction of the courts where in fact leave could have been granted on other grounds. In any case, since the Lugano Convention had entered into force in Ireland on the day before the proceedings were issued, no such leave was required.

The Supreme Court so held in allowing the plaintiff's appeal against the order of the High Court (Miss Justice Carroll) striking out the plaintiff's claim as against the first, second and fifth defendants.

Paul Gallagher SC and Blathna Ruane BL for the plaintiff; Ian Finlay SC and Paul Gardiner BL for the first, second and fifth defendants.

Mr Justice O'Flaherty, delivering the unanimous judgment of the court, said that the plaintiff, which is now in receivership, was claiming against all of the defendants on foot of a policy of insurance under which insurance cover was provided to the plaintiff for a period of one year in respect of any losses that might be sustained by the plaintiff in respect of its stock in trade or other goods at its premises in Ballaghaderreen, Co Roscommon. The premises were destroyed by fire and the plaintiff claimed to have suffered losses in the region of £1.8 million. The first defendant, who appeared to be the leading insurer, indicated that in principle liability under the policy was accepted. However, the defendants were not happy that the full extent of the claim had been approved and refused to make payment in the full amount without further evidence.

There were procedural difficulties in relation to the first, second and fifth defendants. On 16 November 1993, the plaintiff applied to the High Court (Mr Justice Geoghegan) for an order pursuant to Order 11 Rule 1 (e) and (f) of the Rules of the Superior Courts to give leave to the plaintiff to serve notice of the originating summons on the first, second and fifth defendants out of the jurisdiction. The application was grounded on the affidavit of the plaintiff's solicitor stating that the claim was on foot of the insurance policy, but it was mistakenly stated that the insurance contract had been entered into on behalf of the defendants by the defendants' agent within this jurisdiction. Leave was granted on the basis that it appeared "that this intended action falls within the class of actions set out in Order 11 Rule 1(e) of the Rules of the Superior Courts." Order 11 Rule 1 provides as follows "Provided that an originating summons is not a summons to which Order 11A applies, service out of the jurisdiction of any originating summons or notice of an origination summons may be allowed by the Court whenever . . . (e) the action is one brought to enforce, rescind, dissolve, annul or otherwise affect a contract, or to recover damages or other relief for or in respect of the breach of a contract: . . . (ii) made by or through an agent trading or residing within the jurisdiction on behalf of a principal trading or residing our of the jurisdiction; or (iii) by its terms or implication to be governed by Irish law, or is one brought in respect of a breach committed within the jurisdiction of a contract wherever made, even though such breach was preceded or accompanied by a breach out of the jurisdiction which rendered impossible the performance of the part of the contract which ought to have been performed within the jurisdiction . . ."

The plaintiff's solicitor, in swearing his affidavit, mistakenly relied on sub-paragraph (ii) of Rule 1(e): he should have relied on sub-paragraph (iii). Subsequently, the plaintiff bought a motion for judgment in default of defence against all of the defendants, whereupon the first, second and fifth defendants challenged the jurisdiction of the court on the basis that they had never had an agent within the jurisdiction. The plaintiff then applied for liberty to amend the plenary summons and statement of claim to make reference to the power of the Irish courts to determine the matters in issue in the proceedings pursuant to the jurisdiction conferred on them by the Lugano Convention, which has been given the force of law in this jurisdiction under the Jurisdiction of Courts and Enforcement of Judgments Act 1993. The plaintiff's cause of action fell within Article 8 of the Convention with the result that no leave under Order 11 was required as Order 11A applied to the proceedings.

At the time the application was made to Mr Justice Geoghegan, the Lugano Convention had not entered into force in Ireland. It entered into force on 1 December 1993 and proceedings were issued on 2 December 1993. Therefore, when proceedings were issued, no leave of the court was required.

However, the plaintiff wanted service to stand. On hearing the defendants' motion, Miss Justice Carroll delivered judgment on 31 July 1995. She stated that she must assume that the order was made on the agency ground and that she could not assume that Mr Justice Geoghegan would grant service out of the jurisdiction on the grounds contained in rule 1(e)(iii) on the evidence before him.

On this appeal to the Supreme Court, the plaintiff submitted that the correct inquiry was to find out whether there was evidence before the court which established if the court did have jurisdiction under Order 11 and in particular whether it had jurisdiction under Order 11 Rule 1(e) which was the order on foot of which the leave was granted.

Mr Justice O'Flaherty said that the court agreed with that submission. The High Court clearly had jurisdiction to made the order and accordingly the relief sought by the defendants ought to have been refused.

In the High Court, Miss Justice Carroll had drawn a distinction with the case of Doran v Power [1996] ILRM 55. In that case the Supreme Court granted leave to the plaintiff to the amend the plenary summons by deletion. Miss Justice Carroll had distinguished that case on the grounds that more than deletion was required here. Mr Justice O'Flaherty said the court regarded this as a distinction without a difference. Whether an amendment is by deletion or by addition was not germane.

Mr Justice O'Flaherty also rejected the defendants' submission that the plaintiff was obliged to elect as to whether it would proceed under Order 11 or Order 11A. He stated that at the time of the application to the High Court only Order 11 was open to the plaintiffs as the Lugano Convention was not then in force. As to the application under Order 11, the plaintiff had apologised for its mishap, and that should have been accepted by the defendants. The court said that these court applications were excessive and unnecessary.

Mr Justice O'Flaherty said that the Supreme Court had a full discretion of its own as laid down in Re Morelli [1968] IR 11 and it had a further discretion under Order 28 Rule 12 of the Rules of the Superior Courts to amend any defect or error in any proceedings for the purpose of determining the real question or issue raised by the proceedings. This was a case where that discretion should be exercised in favour of the plaintiff.

Mr Justice O'Flaherty declared that since the Lugano Convention was in force at the time that proceedings were issued, then the Lugano Convention also applied to the proceedings. Identical proceedings were issued under that Convention, and this was no doubt done ex abundanti cautela on the part of the plaintiff's advisers, but those proceedings would now seem to be redundant.

Solicitors: Arthur Cox (Dublin) for the plaintiff; Mason Hayes & Curran (Dublin) for the first, second and fifth defendants.