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Judgment
Title:
Murray -v- Budds & ors
Neutral Citation:
[2017] IESC 4
Supreme Court Record Number:
91/15
Court of Appeal Record Number:
2014 235 COA
Date of Delivery:
02/02/2017
Court:
Supreme Court
Composition of Court:
Denham C.J., O'Donnell Donal J., McKechnie J., MacMenamin J., Laffoy J., Dunne J., O'Malley J.
Judgment by:
Denham C.J.
Status:
Approved
Result:
Appeal dismissed


THE SUPREME COURT

Appeal No. 91/15


Denham C.J.
O’Donnell J.
McKechnie J.
MacMenamin J.
Laffoy J.
Dunne J.
O’Malley J.
      Between/
Martin Murray
Plaintiff/Appellant
and

Conan P. Budds, Solicitor and Anthony T. Hanahoe,

Terence Hanahoe and Michael E. Hanahoe,

trading as Michael E. Hanahoe, Solicitors

Defendants/Respondents


Judgment delivered the 2nd day of February, 2017 by Denham C.J.

1. This is an appeal, upon which leave was granted by the Court, brought by Martin Murray, plaintiff/appellant, who is referred to as “the plaintiff”.

2. Conan P. Budds and Anthony T. Hanahoe, Terence Hanahoe and Michael E. Hanahoe, trading as Michael E. Hanahoe Solicitors, the defendants/respondents, are referred to as “the defendants”.

3. The Court determined that the plaintiff had raised an issue of general public importance, being as to whether a claim framed as a professional negligence action seeking damages for negligence and breach of contract, in which the particulars of loss and damage claimed are worry and stress short of a recognised physical injury, should be treated as a personal injury action, subject to the statutory limitation period applicable to personal injury actions. The Court granted leave to the plaintiff to appeal to this Court on that issue.

Background
4. The plaintiff retained the services of the defendants to represent him in criminal proceedings.

5. I gratefully adopt the background facts as described by Peart J., in the Court of Appeal judgment of the 19th November, 2015.

6. The plaintiff was charged with possession, with intent to supply, of a significant quantity of heroin. He was convicted of that offence on the 11th February, 1999, and received a seven year sentence of imprisonment, from which he was released in September, 2004. The plaintiff was unsuccessful in two separate appeals against his conviction to the Court of Criminal Appeal. In 2000 his first appeal was based on a number of alleged errors on the part of the trial judge. In 2005, his second appeal heard after his release from prison, was based on an alleged failure of his solicitor to adequately and properly prepare for his trial, and the alleged failure of both solicitor and counsel to pay heed to his instructions during the course of his trial. However, neither of his appeals succeeded.

7. The plaintiff issued a plenary summons in February, 2005, claiming damages for negligence and breach of contract by the defendants in their provision of legal services prior to and during his criminal trial.

8. The defendants entered a full defence.

Two Motions
9. The defendants issued a motion seeking to dismiss the plaintiff’s claim as (i) statute barred; (ii) an abuse of process; and (iii) frivolous or vexatious.

10. After a part hearing of the defendants’ motion, the plaintiff issued a motion seeking to amend his statement of claim.

Two appeals to Court of Appeal
11. There were two appeals before the Court of Appeal. The plaintiff appealed to the Court of Appeal against an order of Charleton J. dated the 20th April, 2009 where it was ordered:-

      (a) that the proceedings be struck out as an abuse of process because, being an action alleging professional negligence, it was launched without first ascertaining that there were reasonable grounds for so doing by obtaining appropriate expert evidence to support it; and

      (b) that the plaintiff pay the defendants’ costs of the motion when taxed and ascertained.

12. The defendants appealed to the Court of Appeal against an order of Clark J. dated the 23rd November, 2010, where she:-
      (a) permitted the plaintiff to amend his pleadings in order to introduce a new claim for “loss and damage in the week of the 3rd to 10th February 1999”, the particulars of which loss were that “the plaintiff was exposed to the worry and stress from the uncertain position where he found himself in the criminal justice system facing an imminent trial without knowing who his counsel would be”;

      (b) declined the defendants’ application to strike out the proceedings in their entirety on the basis of s. 3(1) of the Statute of Limitations (Amendment) Act, 1991, and

      (c) directed that the issue of the application of the Statute of Limitations be determined by the trial judge.

13. The plaintiff had claimed in the statement of claim 4(b) that:-
      “They failed to instruct Counsel properly or adequately, and indeed retained Counsel only on the night before the Trial…”
Thus, the plaintiff complained that, despite knowing for approximately a week that counsel would be unavailable, no new counsel was engaged to defend him until the day before the trial was due to take place. The defendants, in their defence, denied that counsel was retained only on the night before the trial.

14. The plaintiff’s claim, pursuant to the order of the High Court (Clark J.), was therefore a claim for loss and damage in the week of the 3rd to the 10th February, 1999, arising from the fact that the plaintiff was exposed to the worry and stress from the uncertain position where he found himself in the criminal justice system facing an imminent trial without knowing who his counsel would be.

15. In the Court of Appeal the defendants submitted that while Clark J. struck out the claims of the plaintiff as originally constituted as an abuse of process, she erred by allowing the plaintiff to amend his proceedings and by not simply striking out the entire proceedings.

16. The Court of Appeal held that the permitted claim was a claim in tort only, and that it could only therefore be a personal injury claim. The fact that contract was pleaded, as part of the claims which were originally made, was not relevant as all those claims had been struck out.

17. The Court of Appeal (Peart J.) concluded:-

      “29. There is no doubt in my view that the claim permitted is statute-barred. I appreciate that no amended Statement of Claim has been delivered by the plaintiff, presumably because the order of Clark J. is under appeal, but it can be noted and had regard to that in its Defence to the Statement of Claim originally delivered, the defendants pleaded the statute. There have been cases where a defendant has attempted to have a plaintiff’s claim struck out ahead of the delivery of its defence, and that application has been considered to be premature, since a plea on the statute is a plea by way of defence. But here the position is clear. The plaintiff’s claim has been permitted by way of amendment where the cause of action accrued at latest on the 10th February 1999. That is not in dispute. It is now a new personal injury claim in tort. A two year, or at best from the plaintiff’s point of view a three year, limitation period applies. In my view, Clark J. ought not to have permitted an amendment of the claim in order to introduce a personal injury claim that was clearly statute-barred. She was already in possession of all the facts and circumstances said to give rise to that claim, as is clear from the very precise nature of the amendment permitted by her. On that ground alone I would allow this appeal and vacate that part of the order of Clark J. which permitted an amendment to the plaintiff’s claim.

      30. There is, however, another important aspect to the appeal which should be addressed by reference to the judgment of Hogan J. in Walter and another v. Crossan and others [2014] IEHC 377. It is the entirely separate question whether, even if this claim was not statute-barred, damages for the alleged worry and stress during the week of 3rd February 1999 is recoverable at all, given the absence of any pleaded recognizable psychiatric injury. In Walter, Hogan J. examined the relevant case-law in this area both from this and the neighbouring jurisdiction with typical care and exhaustion, and concluded on the facts of that case that even though there was a duty of care owed to the plaintiff purchasers by the firm of solicitors acting for the builder of the house, the only damages claimed were for “mental distress, upset and inconvenience falling short of nervous shock or psychiatric injury” and as such were not recoverable. I appreciate that in Walter there was no contractual relationship between the plaintiffs and the solicitor firm and that the only remedy, if any, was in negligence predicated on a duty of care being owed. But in the present case, the claims based upon a breach of contract have been expressly struck out by Clark J., and cannot subtend the claim that was permitted by way of amendment. It is now solely a claim in negligence, and it seems to me in such circumstances that the damage being claimed are, as in Walter, in respect of a category of claim for which damages are not recoverable, namely mental distress, stress generally and worry, but short of any recognised psychiatric illness.

      31. That being my conclusion, I am satisfied that having struck out all the plaintiff’s existing claims in the proceedings, Clark J. erred in permitting the plaintiff to amend his Statement of Claim by inserting the new claim for damages in negligence and breach of duty which are provided for in her order under appeal by the defendants.”

The Court of Appeal then allowed the appeal of the defendants against that part of the order of Clark J.

18. As to the plaintiff’s appeal against the order of the High Court (Charleton J.) of the 20th April, 2009, when the learned trial judge acceded to a motion by the defendants to strike out the plaintiff’s proceedings as an abuse of process on the ground that being an action alleging professional negligence, it was launched without first ascertaining that there were reasonable grounds for so doing by obtaining appropriate expert evidence to support it, the Court of Appeal held, Peart J. stating:-

      “In my view it is unnecessary now to dispose of that appeal, save to say that if I was required to reach a determination I would have allowed that appeal because, while there is certainly authority to the effect that in cases alleging medical negligence against a doctor or other professional person, it would be an abuse of process or irresponsible to launch such proceedings in the absence of the plaintiff’s solicitor satisfying himself or herself that there were reasonable grounds for the allegations of negligence being made, I would not exclude the possibility that where the action is being contemplated against a solicitor for professional negligence, the plaintiff’s solicitor may not in every case require to obtain an independent expert opinion from another solicitor or counsel in order to form the relevant opinion that the facts of the case disclose a prima facie case, and that it is not irresponsible to commence the proceedings.

      34. Every case will depend on its own facts, and a plaintiff’s solicitor ought to exercise caution in every such case. In any case where he or she has a doubt, prudence suggests that an opinion from another expert be sought in advance of commencement. I believe that such a view is consistent with what was stated by Denham J. (as she then was) when, having considered the views expressed by Barr J. in Reidy v. National Maternity Hospital [1997] IEHC 143, and those of Kelly J. in Connolly v. Casey & Fitzgibbon [2000] 1 IR 345, she expressed agreement as follows:


        While bearing in mind the important right of access to the Courts I am satisfied that these statements of law are correct. To issue proceedings alleging professional negligence puts an individual in a situation where for professional or practice reasons to have the case proceed in open Court may be perceived and feared by that professional as being unprofessional conduct’.”
19. The Court of Appeal stated that it was unnecessary to reach a concluded view on the appeal from Charleton J., given that the appeal against the order of Clark J. was allowed.

Submissions
20. The parties filed written submissions in this appeal. The Court also heard oral argument by counsel on behalf of each party.

Single appeal
21. As the Court of Appeal made no determination on the appeal from Charleton J., the issue before the Court arises from the decision of the Court of Appeal on the appeal from the decision of Clark J.

Determination
22. In its determination [2016] IESCDET 20, the Court was of the view that the plaintiff had raised an issue of general public importance, whether a claim framed as a professional negligence action seeking damages for negligence and breach of contract in which the particulars of loss and damage claimed are worry and stress short of a recognised physical injury should be treated as a personal injury action subject to the statutory limitation period applicable to personal injury actions.

Issues
23. The plaintiff submitted that two questions arise on the determination of the Court, being:-

      1. Whether the plaintiff’s claim, as amended by Clark J., constitutes a claim for personal injuries.

      2. If the claim should not be treated as a personal injuries action, is the loss and/or damage claimed by the plaintiff for “worry and stress” recoverable in an action for breach of contract and/or professional negligence.


Personal Injury
24. If this claim were treated as a personal injury claim, it would be statute barred, as the plaintiff’s claim issued over three years after the event, being the statutory limitation period applicable.

25. If this claim were treated as a personal injury claim, the loss and damage claimed, being for worry and stress, does not amount to a recognised psychiatric injury, and thus, is not recoverable in a personal injury claim.

Tort
26. I would affirm the decision of the Court of Appeal (Peart J.) that the claim as amended by Clark J. in the High Court is solely a claim in negligence and so is statute barred. Further, as it is a claim for “worry and stress” without any psychiatric illness, no damages would, at any rate, be recoverable. Consequently, I would dismiss this aspect of the appeal of the plaintiff, on tort.

27. I agree with the decision of Hogan J. in Walter v Crossan [2014] IEHC 377, as he then was a judge of the High Court, where he held that damages for worry and stress not giving rise to psychiatric injury is not recoverable in tort.

28. I note also the decision in Larkin v Dublin City Council [2008] 1 IR 391. There the plaintiff suffered upset and emotional upheaval, but no psychiatric illness, because of a mistaken communication that he had been promoted. Clarke J. accepted that there had been a duty of care, which had been breached, but held that it did not give rise to any injury which entitled the plaintiff to recover damages.

29. Thus, I would dismiss this aspect of the plaintiff’s claim. I am satisfied that the claim as framed in the amendment made by Clark J., seeking damages for negligence, in which the particulars of loss and damage claimed are for worry and stress short of psychiatric illness, should be treated as a personal injury action, and so subject to the statutory limitation period applicable to personal injury actions. Consequently, I would affirm the finding of the Court of Appeal that the claim was statute barred. I would affirm also the decision of the Court of Appeal that damages would not lie for worry and stress in the absence of a psychiatric illness. Consequently, I would dismiss the aspect of the appeal relating to the tort of negligence for personal injuries.

Professional Negligence and Breach of Contract
30. The plaintiff moved the claim, against the solicitor defendants, as a claim for damages for professional negligence and breach of contract.

31. There is rather an unusual matrix of facts in this case. The issue of the claim in professional negligence has been struck out by Charleton J. in the High Court. Given the run of events in the Court of Appeal, the appeal against Charleton J. was not addressed. Thus, the decision of the High Court stands, striking out the claim for professional negligence.

32. However, an issue may be inferred from the determination, and an issue argued by the plaintiff was as to whether the loss and damage claimed by the plaintiff for “worry and stress” may be recoverable in an action for breach of contract and/or professional negligence.

33. In such a situation a question would arise as to whether he would be entitled to recover for loss and damage as sought, short of a psychiatric illness.

Addis v Gramaphone Co. Ltd [1909] AC 488

34. It was established in Addis v Gramaphone Co. Ltd [1909] AC 488, that Courts would not in general permit damages for worry or upset as a consequence of a breach of contract. In Addis a servant was wrongfully dismissed from his employment. The issue of damages arose. In the House of Lords Lord Loreburn L.C. stated:-

      “To my mind it signifies nothing in the present case whether the claim is to be treated as for wrongful dismissal or not. In any case there was a breach of contract in not allowing the plaintiff to discharge his duties as manager, and the damages are exactly the same in either view. They are, in my opinion, the salary to which the plaintiff was entitled for the six months between October, 1905, and April, 1906, together with the commission which the jury think he would have earned had he been allowed to manage the business himself. I cannot agree that the manner of dismissal affects these damages. Such considerations have never been allowed to influence damages in this kind of case.

      If there be a dismissal without notice the employer must pay an indemnity; but that indemnity cannot include compensation either for the injured feelings of the servant, or for the loss he may sustain from the fact that his having been dismissed of itself makes it more difficult for him to obtain fresh employment.”

Lord Atkinson stated:-
      “I have always understood that damages for breach of contract were in the nature of compensation, not punishment,

      In Sikes v Wild (1861) 1 B. & S. 587, at p. 594, Lord Blackburn says:


        “I do not see how the existence of misconduct can alter the rule of law by which damages for breach of contract are to be assessed. It may render the contract voidable on the ground of fraud or give a cause of action for deceit, but surely it cannot alter the effect of the contract itself.”

      There are three well-known exceptions to the general rule applicable to the measure of damages for breach of contract, namely, actions against a banker for refusing to pay a customer’s cheque when he has in his hands funds of the customer’s to meet it, actions for breach of promise of marriage, and actions like that in Flureau v Thornhill (1776) 2 W. BI. 1078, where the vendor of real estate, without any fault on his part, fails to make title. I know of none other.

      In many other cases of breach of contract there may be circumstances of malice, fraud, defamation, or violence, which would sustain an action of tort as an alternative remedy to an action for breach of contract. If one should select the former mode of redress, he may, no doubt, recover exemplary damages, or what is sometimes styled vindictive damages; but if he should choose to seek redress in the form of an action for breach of contract, he lets in all the consequences of that form of action; Thorpe v Thorpe, (1832) 3 B. & Ad. 580. One of these consequences is, I think, this: that he is to be paid adequate compensation in money for the loss of that which he would have received had his contract been kept, and no more.”

      [Emphasis added]

33. This has remained for many years the foundation case setting out the law on such damages in a contract action, with the few exceptions to the general principles as identified by Lord Atkinson.

34. There have been some additional exceptions added in specific cases.

35. In McDermott, Contract Law (Butterworths, 2001) paras 22.57 and 22.58 the theory behind the exclusionary rule was provided:-

      “Many factors explain the courts restrictive approach to non-pecuniary losses. The Addis decision reflects the individualist orientation of traditional contract law under which contracts are impersonal relationships, concerned primarily with economic exchange, and do not typically involve other elements of the parties personalities. It also reflects an historical desire not to restrict unduly the ability of employers to dismiss employees and a mistrust of exemplary damages (which appeared to be what the plaintiff was seeking in Addis). In Baltic Shipping v Dixon [1993] 176 CLR 344, Mason C.J. observed that:-

        ‘The conceptual policy foundations of the general rule are by no means clear. It seems to rest on the view that damages for breach of contract are in essence compensatory and that they are confined to the award of that sum of money which will put the injured party in the financial position the party would have been had the breach of contract not taken place.’”
Mason C.J. held that the policy is based on an apprehension that the recovery of compensation for injured feelings will lead to inflated awards of damages in contract cases. Other reasons put forward include:-
        (i) It is too harsh on the defendant to have to pay damages for mental distress.

        (ii) Mental distress is incapable of exact proof.

        (iii) The risk of mental distress is voluntarily assumed by the plaintiff upon entering into the contract.”

36. The law was further described in Watts v Morrow [1991] 1 WLR 1421 by Bingham LJ:-

“A contract-breaker is not in general liable for any distress, frustration, anxiety, displeasure, vexation, tension or aggravation which his breach of contract may cause to the innocent party. This rule is not, I think, founded on the assumption that such reactions are not foreseeable, which they surely are or may be, but on considerations of policy. But the rule is not absolute. Where the very object of a contract is to provide pleasure, relaxation, peace of mind, or freedom from molestation, damages will be awarded if the fruit of the contract is not provided or if the contrary result is procured instead.”

[Emphasis added]

37. I agree with that statement of Bingham LJ.

38. The key is that one looks to the very object of a contract. Also, I agree with Lord Neuberger in Hamilton Jones v David & Snape [2004] 1 WLR 924. In Hamilton Neuberger J. held that the facts of the case took the solicitor-client relationship into a special categorisation, as the solicitor had been retained in particular to address the anxiety of the wife that her husband would abduct their children. This did happen, her solicitors having taken insufficient measures to prevent such abduction. Lord Neuberger stated:-

      “52. Where a claim is founded in contract, the general rule is that the contract breaker cannot be liable for damages for injured feelings or distress: see Addis v Gramaphone Co Ltd [1909] AC 488, which still remains the law, although it is subject to exceptions (as mentioned by Lord Bingham of Cornhill in Johnson v Gore Wood & Co [2002] 2 AC 1, 37 – 38; I would also refer to the discussion in the speech of Lord Cooke of Thorndon in the same case at p 49f – 50h). The question, therefore must be whether a case such as the present falls into one of the established exceptions to the rule in Addis v Gramaphone Co Ltd or whether, indeed, it should represent a new exception to the rule.”
The Court was satisfied in that case that a significant aspect of the instructions was that the wife would retain custody of her children for her own pleasure and peace of mind.

39. Other types of contracts where an exception to the rule in Addis arises include a contract in relation to a holiday, where such a contract is to provide for pleasure and relaxation.

40. Also, it has arisen where there was a failure to secure an injunction to prevent a plaintiff being molested Heywood v Wellers [1976] 2 WLR 101

41. In addition, it has arisen where there was a wrongful adjudication as a bankrupt: Hussey v Dillon [1995] 1 IR 111.

42. The plaintiff relied on McLeish v Amoo-Gottfried & Co. (1993) The Times, 13th October, 1993, (1993) 10 PN 102. This was a solicitor’s negligence action in which liability was admitted and it came before the Queen’s Bench Division for assessment of damage. In McLeish Scott Baker J. stated:-

      “Mr. Goodman for the plaintiff contends that, subject to the normal rules of remoteness and mitigation, damages for distress may form part of an award in cases of professional negligence, irrespective of whether the plaintiff chooses to frame his case in contract or tort. Whilst mental distress is not in itself sufficient damages to ground an action in tort, Mr. Doggett for the Defendants accepts that the plaintiff is entitled to damages in contract under this head and refers me to the judgment of Lord Justice Bingham in Watts v. Morrow [1991] 4 All ER 937, 54 Build LR 86 at 959, of the former report where he says…”
Here Scott Baker J. quotes from Bingham L.J., as set out above.

42. I would distinguish McLeish. In that case liability was admitted, it has not been in this case. Further, indeed it was pointed out by Scott Baker J. that, mental distress is not in itself sufficient damages to ground an action in tort, such as claimed in this case. Scott Baker J. relied on Watts v. Morrow where Bingham L.J. stated that a contract breaker is not in general liable for distress etc., but he indicated exceptions based on the object of the contract. The circumstances in McLeish are entirely different to that of the plaintiff. Consequently, I find no persuasive value in McLeish

43. The issue of such damages in contract cases has arisen as an ancillary ground in cases in Ireland. In Kelly v Crowley [ 1985] 1 IR 212, Murphy J. held that a solicitor was professionally negligent. However, a claim for mental distress was not permitted as an additional claim for damages.

44. In Doran v Delaney (No. 2) 1999 1 IR 303, Geoghegan J. did award damages for a high degree of anxiety suffered by the plaintiff arising from the defendants’ negligence. He held that the plaintiffs suffered a high degree of anxiety and that their health had been undermined because of the negligence of their solicitor’s advice in purchasing a site in order to construct a dwelling house. The court held that the plaintiffs would never have engaged in the transaction, which resulted in a lengthy dispute and forced them to resell the property at a loss and left them in considerable debt, if they had been adequately informed by the defendants. However, in Doran v. Delaney (No 2.) the plaintiffs’ action was not only against their own solicitor, but also against the vendor and against the vendor’s solicitors, and they were successful against all the defendants. The award of €10,000 general damages was against all of the defendants.

45. In analysing whether a contract may be an exception to the rule in Addis it is useful to consider the analysis by Brennan J. in Baltic Shipping Co. v Dillon (1993) 111 ALR 289, where he stated:-

      “To ascertain whether the obtaining of peace of mind is the object of a contract or, more accurately, an object of a contract, reference is made to its terms, express or implied, construed in the context of facts which the parties know or are taken to have known. Thus, if peaceful and comfortable accommodation is promised to holidaymakers and the accommodation tendered does not answer the description, there is a breach which directly causes the loss of the promised peacefulness and comfort and damages are recoverable accordingly. In cases of this kind, a statement of the promisor commending a service or facility to be provided under the contract is frequently a term of the contract, not a mere representation.”
46. The law in Northern Ireland is similar to that in Australia. Smyth v Huey & Co [1993] NI 236, was a case of solicitor’s negligence in relation to a conveyance. The Court held that the plaintiffs were not entitled to damages for distress. The test as to exceptions to the Addis rule was stated as:-
      “a plaintiff is not entitled to general damages for ‘distress and inconvenience’ unless he can bring himself within one of the two exceptions to the general rule: namely (1) mental distress caused by physical discomfort or inconvenience resulting from breach of duty in contract or in tort. (2) A contract whose very object is to provide pleasure, relaxation, peace of mind or freedom from molestation.”

Conclusion
47. In this appeal the plaintiff asked the Court to create new law, that Addis should not be followed. Or, if the Court would not take that step, that the Court would hold that the plaintiff’s claim came within one of the recognised exceptions to Addis. Or, it was suggested, the Court could find a new exception to Addis.

48. In this case the plaintiff had been represented by solicitor and counsel and there was no breach of professional standards as he was competently represented. The plaintiff was, in effect, trying to establish a separate cause of action and seeking damages for worry and stress. This case is further complicated by the fact that there was not a direct contract with the solicitor, the plaintiff had the benefit of the statutory legal aid scheme with a solicitor assigned by the Court. However, the fundamental situation is that the plaintiff had competent legal advisors. The only injury alleged is worry and stress arising because he did not know who his counsel would be the day before his trial.

49. Addis v. Gramaphone Co. Ltd [1909] AC 488, remains the law in Ireland.

50. I am satisfied that the plaintiff’s claim does not come within one of the recognised exceptions to Addis. If one presumed there was a contract, it was for professional services, and there was no breach as he was competently legally represented. This case does not establish a stand alone claim. There is no stand alone right of claim for being upset. Insofar as it is a personal injury, it is statute barred.

51. The nature of the contract was not such that damages for distress would be available.

52. There is no reason, in all the circumstances of the case, to consider any additional exceptions to the law as set out in Addis and subsequent judgments.

53. The appeal before this Court is confined to the determination made on the application for leave. There are many issues in the proceedings which are not before this Court. On the issue before the Court, I would dismiss the appeal.











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