Judgment: 2012-06-21 · Court archive

Supreme Court dismisses appeal over stay of home-building dispute pending arbitration

The court upheld a High Court order staying the Fureys’ proceedings against Lurgan-ville Construction, finding the company had neither taken a step under the 1980 Act nor been estopped from relying on its arbitration clause.

Supreme Court ·

Who, what, where, when and why

Who
  • Lucy Furey (Plaintiff)
  • Lurgan-ville Construction Company Limited
  • Patrick Duff
  • David J. O'Daly (Defendant)
What

The court upheld a High Court order staying the Fureys’ proceedings against Lurgan-ville Construction, finding the company had neither taken a step under the 1980 Act nor been estopped from relying on its arbitration clause.

Where

Places mentioned in the report

  • Bailieboro
When

Judgment:

Why

Reasons reported in the judgment

The Supreme Court has dismissed John and Lucy Furey’s appeal against a High Court order staying their proceedings against Lurgan-ville Construction Company Limited pending arbitration. The court held that the company had not taken a step that prevented it relying on the building contract’s arbitration clause and that its conduct did not establish an estoppel.

The Supreme Court has dismissed John and Lucy Furey’s appeal against a High Court order staying their proceedings against Lurgan-ville Construction Company Limited pending arbitration. The court held that the company had not taken a step that prevented it relying on the building contract’s arbitration clause and that its conduct did not establish an estoppel.

The dispute arose from an October 2002 building contract under which Lurgan-ville agreed to construct a house at No. 1 Lurgan-ville, Bailieboro, for €146,020.10 including VAT. Patrick Duff, described in the judgment as the owner of the site and Lurgan-ville’s principal, also signed the building contract for the company. Architect David J. O’Daly was involved in the project. The Fureys later became dissatisfied with aspects of the transaction and issued proceedings in June 2005.

Lurgan-ville and Duff entered appearances in June 2005. After the Fureys sought judgment in default of defence, the parties agreed to extra time for a defence, and the High Court made a consent order in July 2006 granting three weeks and awarding the Fureys costs. Lurgan-ville first asserted a right to arbitration on 3 November 2006, when a defence was filed for Duff. A separate defence had been filed for O’Daly in September.

The Fureys argued that agreeing to resolve the default motion and obtain an extension of time amounted to a step in the proceedings under section 5 of the Arbitration Act 1980. They also argued that Lurgan-ville’s conduct had led them reasonably to believe the company would defend the case in court, creating an estoppel. A further argument about the inconvenience of separate court and arbitration proceedings was not pursued orally.

Justice Clarke said the consent arrangement did not amount to a step under the Act. The default motion had already been brought, and the agreement did not engage with the merits or add to the costs already incurred. He followed the approach in *O’Flynn v. Bord Gáis Eireann*, concluding that the arrangement was comparable to a request for extra time made in correspondence, even though it arose in the context of a court motion and was reflected in a consent order.

The court accepted that a party’s conduct could, in principle, prevent it from relying on an arbitration clause. But it found no clear and unequivocal representation by Lurgan-ville that it would not seek arbitration, and no basis for the Fureys’ estoppel argument. The judge also noted that the Fureys had accepted that the 1980 Act did not give the court the general discretion discussed in the English *Taunton-Collins* case to refuse a stay because of the risk of parallel proceedings.

The Supreme Court dismissed the appeal and affirmed the High Court order staying the proceedings against Lurgan-ville pending arbitration. The judgment addresses that stay; it does not state that the Fureys’ claims against Duff or O’Daly were stayed.

Read the original court judgment

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