Commercial Court clarifies the Rule under Order 63A (1)(a)(viii) of the Rules of the Superior Courts, as amended

Background

The Plaintiff applied to have the proceedings entered into the Commercial Court’s List under Order 63A, Rule 4 of the Rules of the Superior Courts 1986, as amended, on the grounds that the proceedings constituted commercial proceedings within the meaning of Order 63A, rule 1(a)(i) and/or rule 1(b) - in that they involved a conspiracy on behalf of all of the Defendants to take the business of the Plaintiff and to replace it with that of the seventh named Defendant Company - and where the quantum of the claim was well in excess of the €1 million threshold for entry to the List.

While the ninth and tenth named Defendants adopted a neutral stance to the application, the first to eight named Defendants objected to the application on the basis that the proceedings were one which, they submitted were, at their core, an employment dispute, where there had been culpable delay on the part of the Plaintiff in bringing the application and where the quantum of the claim was one where it fell below the €1,000,000 threshold.

The Decision

In an ex-tempore judgment delivered by Mr. Justice McDonald on 28th June 2021, Mr. Justice McDonald refused to permit the proceedings entry into the Commercial Court’s List on the basis that the proceedings were one which fell within the exclusion contained under Order 63A, Rule 1(a)(viii) related to services provided under contracts of employment.

Paying particular attention to the language of Order 63A Rule 1(a) which defines the nature of commercial proceedings as including “the provision of services (not including medical, quasi-medical or dental services or any service provided under a contract of employment) where the value of the claim or counterclaim is not less than €1,000,000” and specifically, the wide interpretation that could be attributed to the wording in the Rule which reads “arising from” and “relating to”, Mr Justice McDonald, in light of the Plaintiff’s Statement of Claim - where a number of the prayers for relief referred to Orders sought against the Defendants for actions that they had taken during the course of their employment – held that the nexus between the Defendants’ conduct and their former contracts of employment was very clear.

Mr Justice McDonald acknowledged that applications for entry had been successfully made in cases[1] notwithstanding similar background facts, but as there were no reported judgments on such cases, he did not know what submissions had been made, and accordingly, on the grounds outlined above refused entry of the proceedings to the Commercial List.       

In respect of the second and third arguments raised by the Defendants relating to the allegation of delay and the issue of quantum of the claim, as the application had fallen at the first hurdle, Mr. Justice McDonald did not deal with these issues in substance; however, he did comment that it would have been preferable if it had been brought in or around the time when the Plaintiff had learned of the first to eight named Defendants’, self-admitted, unlawful conduct.

This Article is not intended as legal advice. For further information on applications for entry to the Commercial Court and/or the Commercial Court’s practice in general please contact our Hugh Kane or David Walsh, details as below.  

AUTHORS

Hugh Kane, Partner
E: hkane@kanetuohy.ie  
T: 01 672 2233 

David Walsh, Solicitor 
E: dwalsh@kanetuohy.ie 
T: 01 672 2233