Barry v Medical Defence Union Ltd
| Jurisdiction | Ireland |
| Judge | Mr. Justice Geoghegan |
| Judgment Date | 16 June 2005 |
| Neutral Citation | [2005] IESC 41 |
| Court | Supreme Court |
| Docket Number | No 209/2004 |
and
THE SUPREME COURT
INSURANCE
Contract
Membership of medical defence union - Whether union carrying on insurance business - Rights of indemnity of member of mutual defence fund - Absolute discretion of medical defence union to indemnify member - Contractual obligation on part of medical defence union to deal fairly with member's claim - Whether medical defence union dealt fairly with claim - Appeal dismissed (2004/209 - SC - 16/6/2005) [2005] IESC 41 - Barry v Medical Defence Union
Facts: The applicant appealed against an order of the High Court dismissing an action seeking declaratory and other reliefs essentially with a view to establishing that the respondent as an alleged insurer was obliged to indemnify the applicant, a medical practitioner, in relation both to certain civil actions brought against him and in relation to disciplinary proceedings before the Fitness to Practice Committee under the auspices of the Medical Council.
Held by the Supreme Court (Geoghegan, Fennelly and Kearns JJ) in dismissing the appeal that the applicant was not entitled to any of the declarations sought in the statement of claim or to any relief by way of damages. There was no breach of any contractual obligation of fairness on the part of the respondent.
Reporter: R.W.
MEMORANDUM & ARTICLES OF ASSOCIATION OF THE MEDICAL DEFENCE UNION LTD ART 48
MEMORANDUM & ARTICLES OF ASSOCIATION OF THE MEDICAL DEFENCE UNION LTD ART 47
COMPANIES ACT 1985 S14
(UK)COMPANIES ACT 1963 S25
SWEENEY v DUGGAN 1997 2 IR 531 1997 2 ILRM 211
BRATTON SEYMOUR CO LTD v OXBOROUGH 1992 BCLC 693
MEDICAL DEFENCE UNION v DEPARTMENT OF TRADE 1980 1 CH 82
BAILEY v NEW SOUTH WALES MEDICAL DEFENCE UNION LTD 1995 132 ALR 1
RAFTER v SOLICITORS MUTUAL DEFENCE FUND LTD 2002 3 IR 621 1999 2 ILRM 305
This is an appeal from an order of the High Court (Carroll J.) dismissing an action brought by the appellant against the respondent seeking a number of declaratory and other reliefs essentially with a view to establishing that the respondent as an alleged insurer was obliged to indemnify the appellant, a general medical practitioner, in relation both to certain civil actions brought against him and in relation to disciplinary proceedings before the Fitness to Practice Committee under the auspices of the Medical Council.
Counsel for the respondent in their written submissions to this court have concisely and correctly summarised the two issues which fall for determination in this appeal as follows:
1. Was/is the respondent contractually obliged to indemnify the appellant as alleged?
2. Did the respondent act unlawfully in declining to offer the assistance sought on the appellant & apos;s behalf?
Having regard to the arguments put forward at the oral hearing of this appeal and indeed the written submissions of the appellant, I am obliged to deal with both issues, though in my view, to some extent at least, the first issue is not a genuine issue in the case at all but more a kind of smokescreen to avoid real confrontation with the second issue which is much more important on the facts of this particular case. I will expand on what I mean by that later on in the judgment.
The first question to be considered therefore is what was the contractual relationship between the appellant and the respondent. The case made by counsel for the respondent on this question is quite simple. They refer to the Memorandum and Articles of Association of The Medical Defence Union Limited and in particular to Article 48 of the Articles of Association. I should explain that The Medical Defence Union Limited, generally known as & ldquo;The MDU & rdquo;, is a limited company under English law, the members of which are members of the medical and dental professions. It is worth quoting two of the stated objects numbered (iii) and (iv) respectively.
i & ldquo;(iii) To give advice or legal assistance to or defend or to take part in advising, assisting or defending members or applicants for election to membership or former members of the MDU or the personal representatives of deceased members or former members who may seek such advice and/or who are or are likely to become parties to or otherwise involved in litigation or disputes in respect of matters concerning or affecting directly or indirectly the professional character or interest or conduct in a professional capacity of any such member, deceased member or former member or which raises directly or indirectly a question of professional principle.
(iv) To indemnify wholly or in part and on such terms and conditions as may from time to time seem expedient any member or applicant for election to membership or former member of the MDU or the personal representatives of any deceased member or former member against liability, loss or expense arising from actions, proceedings, claims and demands by or against them in respect of matters concerning or affecting whether directly or indirectly the professional character or interest or conduct in a professional capacity of any such member or applicant for election to membership or deceased member or former member or which raised directly or indirectly a question of professional principle including all incidental or consequential losses, damages, costs, charges and expenses but exclusive of fines or penalties. & rdquo;
It becomes clear, however, from the Articles of Association that the obligation of the respondent to its members is to give discretionary assistance. As between the respondent and its members there is no obligation to indemnify. The relevant provisions are contained in Articles 47 and 48. They read as follows:
2 & ldquo;47. The Board of Management or any member of the Board of Management or employee or agent or committee of the MDU authorised by the Board of Management for the purpose may subject to the limits of any such authority give advice or legal assistance or defend or take part in advising, assisting or defending in respect of any matter, cause or proceedings, concerning or affecting whether directly or indirectly the professional character or interest or conduct in a professional capacity of any member, any applicant for election to membership, any former member, or any deceased member (who was at the date of his death a member or who was not at the date of his death a member but had formerly been a member and had ceased to be such) or in respect of any matter, cause or proceeding which raises difficulty or indirectly a question of professional principle; provided that
(1) the Board of Management or such member of the Board of Management or employee or agent or committee shall be satisfied that in a case involving a member, applicant for election to membership, former member or deceased member the matter originated or the cause or proceeding arose during the period when the person concerned was a member of the MDU or an applicant for election to membership.
(2) If the Board of Management or such member of the Board of Management or employee or agent or committee decides to act in accordance with this Article the person making a request that it do so shall abide absolutely by every decision of the Board of Management or any such member of the Board of Management or employee or agent or committee on the conduct or defence of the matter and shall not himself without prior consent of the Board of Management or any such member of the Board of Management or employee or agent or committee take any steps with reference to such matter or the determination thereof.
For the purpose of proviso (1) in the case of an application by a former member for reinstatement on any register for restoration of a licence or entitlement to practice the profession previously carried out by him or the lifting of a suspension the matter shall be deemed to have originated immediately before the date upon which his name was erased from such register or his licence or entitlements so to practice was withdrawn or cancelled or upon which his registration in such register licence or entitlement was suspended as the case may be.
3 48.(1) The Board of Management or any member of the Board of Management or employee or agent or committee of the MDU authorised by the Board of Management for the purpose may subject to the limits of any such authority and sub-paragraph (3) of this Article, and subject also to the like conditions as specified in the provisos of the preceding Article, grant from the funds of the MDU to any member or any applicant for election to membership or former member or the personal representatives of any deceased member an indemnity wholly or in part with regard to any action, proceeding, claims or demands by or against them in respect of any matter concerning or affecting whether directly or indirectly the professional character or interest or conduct in a professional capacity of any such member, applicant for election to membership or former member (or if the member applicant or former member dies subsequent to the granting of the indemnity his personal representatives) or the personal representatives of the deceased member concerned as the case may be.
(2) & hellip; & hellip; & hellip; & hellip; & hellip; & hellip;
(3) Any such indemnity may be granted or determined by resolution of the Board of Management or any authorised committee or decision of any authorised agent and the grant of indemnity in every case shall be made only upon such terms and conditions as the Board of Management, committee or agent shall think proper and it shall rest...
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